SRINAGAR: A proposed increase in Goods and Services Tax (GST) on Kashmiri handicrafts has caused a stir across Jammu and Kashmir, with artisans, traders, and political leaders expressing deep concern over the potential impact on the region’s traditional industries. Stakeholders warn that the move could devastate Kashmir’s centuries-old craftsmanship and imperil the livelihoods of thousands of artisans.
The GST hike, recommended by the Group of Ministers (GoM) on Rate Rationalisation, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, proposes raising taxes on textile products, including Kashmiri shawls and crewel items, from the current 12 per cent to as high as 28 per cent for items priced above Rs 10,000. This proposal is set to be deliberated upon at the upcoming 55th GST Council meeting on December 21.
In a statement, Jammu and Kashmir National Conference Chief Spokesperson and MLA Zadibal Tanvir Sadiq strongly opposed the proposal, urging the central government to reconsider its GST strategy. “These products are the backbone of Kashmir’s economy and cultural heritage. The proposed GST hike will place an unbearable burden on local artisans and traders, making Kashmiri products less competitive globally. This is particularly alarming in a time of economic instability marked by inflation and stagnant growth,” he said.
Similarly, Apni Party President Syed Mohammad Altaf Bukhari, a former Finance Minister of Jammu and Kashmir, expressed concerns over the proposed tax hike. “The increase in GST rates, especially up to 28 per cent, will severely impact the livelihoods of artisans involved in traditional textiles like shawls and crewel. It will also make these products unaffordable for a large section of consumers, reducing demand and risking widespread unemployment in the sector,” he said.
Artisans and Industry in Crisis
The Kashmir Chamber of Commerce and Industry (KCCI), in its representation to the government, warned that the proposed tax hike would deal a devastating blow to the region’s fragile economic ecosystem. The handicraft sector, which employs over 250,000 artisans—many of whom are women from rural and marginalised communities—relies heavily on the affordability and appeal of its products.
“Kashmir’s handicrafts, particularly Pashmina shawls, are a symbol of our cultural heritage and the backbone of our economy,” said Javid Ahmad Tenga, KCCI President. “The proposed tax structure would be catastrophic for artisans and small businesses. We will oppose it on all forums.”
The Pashmina industry, renowned for its intricate, labour-intensive craftsmanship, is particularly vulnerable. Artisans often spend months creating a single item, and the proposed hike would drastically increase production costs, making the products less competitive both domestically and internationally.
The Directorate of Handicrafts, in a letter to the Commissioner Secretary of Industries and Commerce, emphasised the severe implications of the tax change, stating, “If implemented, the proposed hike will not only threaten the survival of this iconic industry but also erode a vital aspect of Jammu and Kashmir’s heritage.”
Stakeholders have also raised concerns about the broader economic impact. The transition from Value Added Tax (VAT) to GST has already complicated the financial landscape for artisans and traders. The proposed hike would exacerbate these challenges, potentially driving small and medium enterprises out of business.
“The tax structure creates a financial burden when moving products from Kashmir to markets like Delhi. Artisans often face months or years of unsold inventory, and a 28 per cent tax will further destabilise their already precarious finances,” said an industry representative.
As the GST Council prepares to deliberate on these proposals, political leaders, industry stakeholders, and artisans are united in their appeal to the central government to reconsider the tax hike. They argue that preserving the handicraft sector is not just about economic survival but also about protecting a centuries-old cultural tradition that is integral to Jammu and Kashmir’s identity.
The future of Kashmir’s artisanal ecosystem now hangs in the balance, with stakeholders urging the GST Council to prioritise the interests of the region’s artisans and its heritage.
