Artisans, weavers bodies urge Centre to scrap GST on textiles, handicrafts

Artisans and weavers seek zero GST on handlooms and handicrafts citing sectoral distress, while the fertiliser industry urges GST rate cut on inputs and refund of blocked tax credits

Nearly 1,000 artisans, weavers, craft organisations and civil society groups have written to the Union government seeking the removal of Goods and Services Tax (GST) on handwoven textiles and handicrafts, arguing that the levy has “dealt a serious blow” to the sector.

 

In a letter dated August 27, 2025, addressed to Finance Minister Nirmala Sitharaman and copied to the GST Council and the Textiles Ministry, the signatories said: “The entire handmade industry, in particular the handloom industry, is already reeling under the imposition of 5 per cent GST since 2017. We have been very distressed with this move and again now reiterate with full strength our demand for the removal of GST on all handwoven textiles and handicrafts.”

 

Citing official data, the letter noted that the handloom industry supports 35.22 lakh workers, of whom 72 per cent are women, and that 67 per cent earn less than Rs 5,000 per month.

 

The petition warned that GST had widened the price gap between powerloom and handloom products, reduced middle-class demand, and made “inherently sustainable industries artificially unsustainable and unviable.”

 

The stakeholders urged the government to consider a “zero GST” system, abolish interstate GST on exhibition sales, and introduce separate HSN codes to distinguish handmade from machine-made goods.

 

“The zero GST system can be based on factors such as natural materials and handmade techniques, and can possibly kick in after a significant turnover in the case of a formalised entity,” the letter stated.

 

FAI seeks 5% GST on fertiliser raw materials, refund of tax credits

 

Ahead of the GST Council meeting on September 3–4, a delegation of the Fertiliser Association of India (FAI) met Finance Minister Nirmala Sitharaman on Tuesday to press for a reduction in GST on key fertiliser inputs and refund of blocked input tax credits (ITC).

 

The industry body has sought lowering the GST rate on raw materials such as ammonia and sulphuric acid from 18 per cent to 5 per cent, in line with the rate on finished phosphatic and potassic (P&K) fertilisers, and refund of accumulated ITC that has built up because subsidy is excluded from the taxable value of supply.

 

According to an FAI statement, the Finance Minister assured the delegation that the matter would be examined and necessary action taken.

 

Since fertilisers are heavily subsidised and the subsidy portion is excluded from the taxable value, companies end up paying more tax on inputs than they can set off against output tax, leading to a build-up of unutilised ITC. This blockage of funds is straining the working capital of fertiliser manufacturers and making it harder to secure raw materials and ensure timely supply of finished products, FAI said.