GUWAHATI, Sept 20 - Levy of GST has seen a drastic decline in sale of indigenous handicraft products, particularly cane and bamboo furniture, amid fears that rising prices of locally made products would open floodgates for machine-made Chinese and Indonesian goods to take over the markets.
Almost all local handicrafts have been taxed under the GST regime, the highest being 28 per cent for cane furniture and 18 per cent for bamboo furniture. Such locally made furniture is voluminous � they are not completely knock-down unlike their foreign counterparts and cannot be staked while being transported, resulting in high transportation costs. This and the levy of GST have made the local products much costlier than the Indonesian or Chinese products and non-saleable in metros.
Even the symbolic sarai has been taxed under GST (18 per cent), and so are the eco-friendly jute bags and folders. Small cane and bamboo handicrafts have 12 per cent and wood carvings such as rhino and local souvenirs of wood have been put under 18 per cent GST. All handicrafts and bamboo and cane furniture were tax-free in the VAT regime.
�Five per cent GST on handloom is still manageable. But 28 per cent on cane furniture, 18 per cent on bamboo furniture and 12 per cent on other handicrafts is too high. Since April-May, sale of locally made furniture has come down by almost half. People have booked items and then refused to buy, unable to pay the GST,� said a manager of the emporium Pragjyotika here.
Industry sources said already 60 per cent of the furniture and some handicrafts items are Chinese and Indonesian. They are machine-made and cheap compared to the local cane and bamboo furniture and other handicrafts which are made by hand. �The high GST rates have given an added advantage to the imported items,� the sources said. Already, cheap machine-made items imported from Moradabad are taking over the locally-made wood-carved rhinos in the emporiums.
�There has been a slump in the sale of local products due to GST. Many Chinese/Indonesian products have already captured more than 50 per cent of the market share. This is bound to go up further given the condition of the local industry following imposition of GST,� said NN Rana Patgiri of Bodoland Regional Apex Weavers & Artisans Cooperative Federation Ltd.
Pleas for tax exemption made by industry bodies have fallen on deaf ears of the government.
�Cane furniture sector is totally unorganized where artisans work from their homes in rural areas producing low value but voluminous items and selling them in government-sponsored exhibitions across India. Transportation costs further will restrict their profit margins,� secretary of the Assam Handicraft Manufacturers Association, Naveen Sood said in separate representations to the Chief Minister and Finance Minister.