‘There has been no breather yet’
Srinagar: The arrangement of altering or amending any change in Goods and Service Tax has finally shown its true colours as the Jammu and Kashmir government has been unable to get the tax rates on Kashmiri carpets reduced from eight months.
The state government, after the constant demand of handicraft traders to get the tax rates of carpet reduced to 5 percent from 12, has held multiple meetings with the highly powered GST Council, but to no results.
“The government has been pursuing with the GST Council since last year to get the rates reduced,” a top official in finance department told Kashmir Reader. “But we failed. Then a committee was formed to study how GST has impacted the handicrafts, despite it has bled, there has been no breather yet. But we will continue to pursue our case because it is strong.”
“It has broken the skeleton of our trade,” said Sheikh Ashiq former president of Kashmir Chamber of Commerce and Industry, and a leading exporter of Kashmir carpets. “We have been unable to make any substantial business from last year; the primary reason being GST because our goods were not taxed previously.”
Ashiq said that in the previous tax regime, handicrafts were exempted from any tax because it was the domain of the state government to define or decide any rates. Now, he said, after the implementation of GST, the power has been given to GST Council which has only a representative of the state whose opinion does not matter unless consensus was made.
GST Council is a body, headed by India’s finance minister, which can decide any change in the GST. This change is possible only when a consensus is made, otherwise, even when a sector is bleeding, no alteration is possible.
“When we were not part of GST, the state government could decide the rates itself. They gave these powers to GST Council where it has no say,” he added.
The handicrafts, which is important for the Kashmir economy as well as culture, was valued last year at more than Rs 1100 crore, about Rs 450 crore less than what was the highest in 2013-14. The trade was down due to war like situations in countries where it was sold. This year due to slackened business of more than 30 percent, the value is expected to go down.
General Secretary, Kashmir Carpet Manufacturers Association, Farooq shah told Kashmir Reader they have huge stocks in their godowns, and new manufacturing does not take place because there were no buyers for the old stock.
“So in this time of no business, carpet weavers have shifted to do labour work. Reason, high rate of GST. We have been given assurances many times by the government that it would be reduced, but never happened,” he added.
Former Commissioner Secretary Industries & Commerce, Shailendra Kumar, had last year said that the GST would have a bad impact on the industries sector. “The tax will make our products less competitive,” he had said.