KCCI Urges GST Cut on Kashmiri Handicrafts Ahead of GoM Meeting

SRINAGAR: The Kashmir Chamber of Commerce and Industry (KCCI) has appealed to Union Finance Minister Nirmala Sitharaman to reduce Goods and Services Tax (GST) on Kashmiri handicrafts from 12 percent to 5 percent. The representation comes ahead of the Group of Ministers (GoM) meeting scheduled for August 20.

In its letter, the Chamber said the Centre’s proposed two-tier GST structure of 5 and 18 percent, along with a special 40 percent rate on select items, offers an appropriate occasion to address the concerns of the handicraft sector. KCCI has sought parity for Kashmiri handmade products with handmade carpets, which currently attract only 5 percent GST.

The Chamber in its press note highlighted that Kashmiri handicrafts, employing more than 3.8 lakh artisans, many of them women and from economically weaker sections—have witnessed a steep decline in exports, dropping from around Rs 1,700 crore a decade ago to just Rs 733 crore in 2024–25.

KCCI furter stated that the existing 12 percent GST is especially burdensome on products such as Pashmina shawls, where nearly 85 percent of the cost is derived from manual labour. For example, while raw material costs are about Rs 3,500, artisan work in spinning, weaving, embroidery, dyeing and finishing amounts to nearly Rs 8,600. Taxing such labour-intensive goods at a higher rate, the Chamber said, inflates prices, reduces competitiveness, and fuels demand for machine-made imitations.

The Chamber also recalled that the issue was raised with Union Commerce and Industry Minister Piyush Goyal during his recent visit to Kashmir, where he assured that the artisans’ concerns would be conveyed to the Finance Ministry.

KCCI said lowering GST to 5 percent would not only provide relief to artisans but also revive exports, boost rural employment, and safeguard traditional skills intrinsic to India’s cultural heritage. The Chamber expressed hope that the Finance Minister and the GST Council would take a favourable decision during the upcoming deliberations.