Artisans and Weavers Urge Government to Remove GST on Handwoven Textiles and Handicrafts

Nearly 1,000 artisans, weavers, craft organisations, and civil society groups have written to the Union government requesting the removal of Goods and Services Tax (GST) on handwoven textiles and handicrafts. The stakeholders argue that the 5% GST, imposed since 2017, has significantly impacted the traditional handmade sector, reducing incomes and threatening the sustainability of small artisans.

The letter, dated August 27, 2025, was addressed to Finance Minister Nirmala Sitharaman, and copies were sent to the GST Council and the Textiles Ministry.

Key Concerns Highlighted

Impact on Workers:

The handloom industry supports 35.22 lakh workers, of which 72% are women.

Around 67% earn less than ₹5,000 per month, highlighting the low-income, vulnerable nature of the workforce.

Economic Challenges:

GST has widened the price gap between powerloom and handloom products, reducing middle-class demand for handmade items.

Stakeholders argue that the tax has made sustainable and traditional industries artificially unsustainable, affecting livelihoods.

Social and Cultural Impact:

The handmade sector is part of India’s cultural heritage, and higher taxes on these products threaten its continuity and growth.

Proposed Solutions by Artisans and Weavers

Zero GST on handmade textiles and handicrafts: Tax exemption should be based on natural materials and handmade techniques, with possible thresholds for formalised entities.

Separate HSN Codes: To clearly distinguish handmade vs. machine-made products, reducing classification disputes.

Exemption on Exhibition Sales: Removing GST on sales at exhibitions will help artisans reach more customers and sell products more affordably.

Why This Matters

Supports Livelihoods: Removing GST will directly benefit artisans, especially women, by increasing their earnings.

Boosts Demand for Handmade Products: Lower taxes could encourage middle-class consumers to buy more handcrafted items.

Promotes Cultural Heritage: Sustaining handloom and handicraft industries ensures traditional skills are preserved for future generations.

Simplifies Compliance: Separate HSN codes and exemptions will make it easier for artisans to comply with GST laws, reducing legal complications.

Key Takeaways

GST, while essential for revenue collection, can disproportionately affect small and traditional industries.

Policy reforms like zero GST, clear classification, and exhibition exemptions are necessary to protect livelihoods and preserve India’s cultural industries.

Supporting artisans strengthens economic, social, and cultural sustainability, making it a policy priority.

Conclusion

The call by artisans and weavers to scrap GST on handwoven textiles and handicrafts highlights the delicate balance between tax collection and sectoral sustainability. Removing or reducing GST for these traditional industries could revive the sector, improve incomes for vulnerable workers, and protect India’s cultural heritage, while still maintaining transparency and accountability in the taxation system.