Member of committee of administration, J&K region at Carpet Export Promotion Council ( CEPC) and a leading exporter Sheikh Ashiq has filed an online petition demanding roll back of Goods and Services Tax (GST) imposed on handicrafts. In GST list of goods and services, handicrafts have been taxed at 12 percent and come under Integrated State Goods and Service Tax (IGST) category.

The online petition filed on www.change.org, globally renowned public petition platform, has received a good response with hundreds of people signing it within a few hours of it being filed. Ashiq has been previously president of Kashmir Chamber of Commerce and Industry.

"There are no buyers and takers for the finished goods that weavers have made for last 3 years. The imposition of taxes will discourage them to continue with this trade and their families will be affected by the GST regime," the online petition reads.

Speaking to Greater Kashmir, Ashiq said there has been a decline in the handicraft industry since last three years and now levying GST will make Kashmiri handicrafts more "uncompetitive". "Since 2014 floods there has been a slump in handicraft industry. Now levying GST will make handicraft more costlier resulting in less economic returns," Ashiq said. While explaining GST on handicrafts, a senior official of excise and taxation department on the condition of anonymity said traders who purchase products such as carpets from artisans will have to pay tax under Reverse Charge Mechanism (RCM) under which "he receives a part of tax back in form of ITC", the official said. "An artisan is an unregistered person and if buying from him a trader has to pay tax and deposit the same. As soon trader purchases and then sells to exporter he receives Input Tax Credit (ITC) irrespective whosoever he is selling it to," the official said. The official explained there is no taxation liability on export of handicrafts. "If trader exports any handicrafts such as a carpet he will get complete ITC refund but if selling in India he will have to deduct RCM and pay balance tax to government," he said.

"An artisan does not need to register as he is similar to an agriculturalist but if unregistered traders are selling products outside the state then they have a tax liability. The J&K Government is putting forth the case to the GST council that if unregistered handicraft vendor has less than Rs 20 lakh threshhold, let there be no tax liability on him," the official said. While expressing surprise over the decision of imposing tax on handmade carpets, artisans, manufacturers, traders and exporters associated with the Kashmiri handicrafts have demanded the immediate rollback of tax. Recently hundreds of stakeholders including artisan bodies held a meeting to discuss the effect of GST on handicrafts. President, Kashmir Chamber of Commerce and Industry, Mushtaq Wani said state government has deceived artisans by promising them that handicrafts will not be taxed. "KCCI shall use all resources at its command to ensure that the GST in the case of J&K State is rolled back and fiscal autonomy of the state is restored without any more loss of time," Wani said.