Exemption of handicrafts taken up with GST Council, Union Finance Ministry: Drabu
Finance Minister Haseeb Drabu, while calling for revival of handicrafts sector in the state, on Thursday said the tax immunity enjoyed by the industry in the previous indirect taxation system in Jammu and Kashmir will continue under the Goods and Service Tax (GST) regime.
"I have already written to the GST Council and the Union Finance Ministry that the handicrafts sector should be placed in zero percent GST slab. But I will suggest to keep it in five percent slab because the tax will come back as input tax credit which will not be the case if the tax is waived off completely," Drabu was quoted saying, according to an official spokesperson, during a meeting with the representative of the Kashmir Chamber of Commerce and Industry (KCCI) led by its president Mushtaq Ahmad Wani here.
The finance minister said the new tax regime has temporarily disrupted the system which will take six to eight months to stabilize. "The new system will root out corruption. All anomalies will be adjusted. Wherever we can't, we will take a different route. Since returns have to be filed in September, you still have time to understand the system fully," he said.
Drabu urged the traders to organize their businesses and maintain accounts as per laid down norms to get maximum benefits out of the new taxation system. "Let's work out a system where we comply and benefit. There's no incentive to cash transaction under new tax regime, so there is no scope for corrupt practices," he said.
Drabu said "some vested interests are trying to whip up passions by generating controversies where none exists". He directed the Sales Tax Department to organize a workshop with the trader community of the state so as to familiarize them with the new system.
"Today, it is not a GST crisis. It is the crisis because we are interested in politics. We have waived taxes in times of crisis and we will find ways to continue with those exemptions in tourism and handicrafts sectors. What is more important is that we should meet before December and formulate plan to revive the Handicrafts industry," he said.
During the meeting, the finance minister was informed that 1.5 million people, including young boys and girls belonging to disadvantaged sections of the society, were involved in the Handicrafts sector which has recorded a slump in production due to a number of reasons.
"As a society, we have failed to protect our artisan community who evolved a flourishing industry when there was no concept of business in Kashmir Valley. Socially, the artisans are mistreated. Financially, they are hugely underpaid, which has resulted in downturn of the industry," Drabu said. GKNN