By our Staff Reporter
GUWAHATI, July 29: Is GST out to handicap the handicraft sector? It seems so if what haunts the Assam Handicraft Manufacturers' Association (AHMA) has anything to go by. In a memorandum submitted to Chief Minister Sarbanda Sonowal recently, the AHMA has raised the demand for zero GST to all handicraft products as, it feels, levying GST will spell doom for the sector in Assam and other States.
Talking to this reporter, AHMA secretary veen Sood said: “The notification issued by the Government on May 18, 2017 fixed GST rate for bamboo and rattan furniture at 28 per cent. In another notification issued on June 11, 2017 the GST Council announced the revised GST rate of 18 per cent indicating bamboo furniture. What the June 11, 2017 notification indicates is that the 28 per cent GST as mentioned in the May 18 notification was computed at the rate of 23 per cent tax under the VAT regime. However, the June 11, 2017 notification made no mention of cane and rattan furniture under HSN Code 9403. This makes it amply clear that by default products like cane or rattan furniture remained under the ambit of May 18, 2017 notification, that is, under 28 per cent GST rate.”
Sood said: “The first notification of 28 per cent rate was based on hypothetical assumption of VAT rate being 23 per cent and the subsequent reduction of rate to 18 per cent is contradicting to the fact of peak VAT rate being 14.5 per cent. The revision in GST rate refers 9403 to bamboo furniture only. Since tariff item 9403-81-00 covers both furniture of bamboo and rattan, the June 11, 2017 notification, by default, keeps rattan and cane under 20 per cent GST rate. Twenty-eight per cent GST will only sound the death knell for bamboo and rattan sector that ebles lakhs of people belonging to SC/ST/minority community artisans making their ends meet. Zero tax under GST regime will rather encourage and sustain the activities of the vast number of artisans in the country without any new or additiol loss of revenue to the government. Increased employment in the event of zero GST will increase incomes, leading to increase in revenue to the government through incremental consumption of other dutiable goods by the artisal families engaged in producing cane furniture products. Unemployment likely due to cessation of work under new GST rates may lead to social unrest. Keeping in mind that most states have never taxed these products exempted under handicrafts or KVIC products, we appeal to the government to keep cane (rattan) furniture and cane (rattan) products under zero per cent GST.”