Govt working on larger canvass to revive  handicrafts sector: Fin Min

Calling for revival of the traditional handicrafts sector in Jammu and Kashmir, Minister for Finance, Dr Haseeb A Drabu, today said the tax immunity enjoyed by the industry in the previous indirect taxation system will continue under the Goods and Service Tax (GST) regime.

“I have already written to the GST Council and the Union Finance Ministry that the handicrafts sector should be placed in zero percent GST slab.  But I will suggest to keep it in five percent slab because the tax  will come back as input tax credit which will not be the case if the tax is waived off completely,” Dr Drabu said at a meeting with the office-bearers and executive members of the Kashmir Chamber of Commerce & Industry (KCCI) led by KCCI President Mushtaq Ahmad Wani here this morning.

The representatives of various trade bodies associated with KCCI including hoteliers, tour and travel operators, artisans, houseboat owners and other trade bodies were also present in the meeting.

The Finance Minister said the new tax regime has temporarily disrupted the system which will take six to eight months to stabilize. “The new system will root out corruption. All anomalies will be adjusted. Wherever we can’t, we will take a different route. Since returns have to be filed in September, you still have time to understand the system fully,” he said.

Dr Drabu urged the traders to organize their businesses and maintain accounts as per laid down norms to get maximum benefits out of the new taxation system. “Let’s work out a system where we comply and benefit. There’s no incentive to cash transaction under new tax regime, so there is no scope for corrupt practices,” he said.

Dr Drabu said some vested interests are trying to whip up passions by generating controversies where none exists. He directed the Sales Tax Department to organize a workshop with the trader community of the State so as to familiarize them with the new system.

“Today, it is not a GST crisis. It is the crisis because we are interested in politics. We have waived taxes in times of crisis and we will find ways to continue with those exemptions in Tourism and Handicrafts sectors. What is more important is that we should meet before December and formulate plan to revive the Handicrafts industry,” he said.

During the meeting, the Finance Minister was informed that 1.5 million people, including young boys and girls belonging to disadvantaged sections of the society, were involved in the Handicrafts sector which has recorded a slump in production due to a number of reasons.

“As a society, we have failed to protect our artisan community who evolved a flourishing industry when there was no concept of business in Kashmir Valley. Socially, the artisans are mistreated. Financially, they are hugely underpaid, which has resulted in downturn of the industry,” Dr Drabu said.

He said the State Government under Chief Minister Ms Mehbooba Mufti is committed to retrieve the lost dignity of artisans and revive the Handicrafts industry in the State. “The State Government has waived off taxes in previous years and we will find a system of continuing the immunity enjoyed by some of the State’s industries under the new taxation system,” he said.

“The State Government has tried its best to revive the industry. I had formulated a proposal in past to buy carpets worth Rs 100 crores which would have infused the much-needed capital into the industry but the artisans and the traders did not show any interest,” he said.   

The Finance Minister said the State Government is coming out with a larger mechanism for the revival of handicrafts and tourism industry in the State. “We have sustained on these industries at the times of immense stress. Now, we are going to make sure that these industries are revived and rejuvenated,” he said.

“The day we recognize that artisans and crafts-persons are the core of this sector, start respecting them and giving them their due, the problems plaguing the handicrafts enterprises would be over,” he said and added that handicrafts is not any ordinary business for people in Jammu and Kashmir. “It is an expression of our priceless cultural heritage. Indeed, it should be called traditional industry as it is but cultural industry,” he said and called for adopting 3-P (Preserve, Propagate and Professionalize) approach to build a sustainable business for handicrafts.

He said the handicraft enterprises are the most ideal for an economy like J&K with low capital use, high employment intensity and a wide geographical dispersal. “It is a business that can generate huge employment in J&K with minimal use of capital,” he said and added that JK’s artisans and craftsmen don’t need subsidies and industrial policy of the government, but they need a craft policy.

Principal Secretary, Finance, Navin K Choudhary, Commissioner Commercial Taxes, Parvaiz Iqbal Khateeb and other officers of the Finance Department were present at the meeting.

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