Odisha Chief Minister writes to PM over GST exemption on handloom

Chief Minister Naveen Patnaik on Friday reiterated the demand of the State Government for exemption of GST on handloom and handicraft products.

BHUBANESWAR: Chief Minister Naveen Patnaik on Friday reiterated the demand of the State Government for exemption of GST on handloom and handicraft products.In a letter to Prime Minister Narendra Modi, the Chief Minister said a large number of weaver and artisan families, exceeding 3.5 lakh, earn their livelihood from this diverse production base which is next only to agriculture. Stating that handloom and handicrafts form an important part of the State’s cultural heritage and the products are mostly used by the common people, Naveen said prior to the introduction of GST, the Government had always exempted these products from Value Added Tax (VAT). In most of these products, there was also no excise duty, he added.

He said with the introduction of GST with effect from July 1, 2017, handloom fabric and handloom apparels have been made taxable with GST rates of 5 per cent (pc) and 12 pc respectively. Besides, GST rates of 12 pc or 18 pc have been imposed on handicraft items depending on their types, he said and added that though the Odisha Finance Minister had strongly argued in the GST Council that handloom and handicrafts should be kept in the exemption list, it was not agreed to.“This is likely to lead to increase in prices of these products, which will adversely affect the livelihood of the poor families depending upon their production,” he said and added that these issue needs urgent reconsideration in the GST Council for extending GST exemption on these products in the interest of the weavers and artisans.

Meanwhile, Naveen announced that a development council will be set up for welfare of weavers and artisans.

Rally over demands

Bhubaneswar: Members of Odisha Shilpi Mahasangha on Friday took out a rally and staged dharna at PMG Square here protesting implementation of GST on handloom and handicraft products. They also met the Chief Minister demanding GST exemption.At present, both handloom and handicraft items attract GST of 5 per cent (pc) to 28 pc. Not just the finished products, GST is also applicable to raw materials and production cost. They said GST will spell doom for the sectors as it will increase the cost of items, thereby making them costlier in retail market. This will put livelihood of around 35,000 artisans at stake, they added. In a memorandum to the Chief Minister, the craftspersons alleged that both the sectors are facing various issues, including raw material shortage and lack of any benefits. Neither handloom weavers nor handicraft artisans are able to source raw materials and stone sculptors.

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