GST Council likely to continue Nil GST on handloom products, raw silk; recommends status quo

The Group of Ministers (GoM) on GST rate rationalisation has recommended that the exemption on handloom products and raw silk should continue, providing relief to artisans and small weavers across the country.

The GoM has advised maintaining the status quo by keeping handloom items made by weavers at a nil GST rate, as opposed to the 5% levy that was originally considered.

Similarly, it has suggested retaining nil GST on raw silk and other silk weaving materials, which had earlier been reduced from 5%.

The decision, according to officials aware of the deliberations, is aimed at protecting the livelihood of lakhs of traditional artisans who rely on weaving as their primary source of income.

Industry representatives had earlier expressed concerns that even a marginal GST levy on handloom items would significantly push up costs, reduce the competitiveness of locally made products, and hurt demand.

By recommending continuation of the exemption, the GoM has attempted to strike a balance between revenue considerations and the need to support vulnerable sectors.

Officials noted that the handloom and silk weaving sectors, dominated by rural and semi-urban artisans, are highly employment-intensive but operate with low margins.

The panel’s recommendations will now be taken up by the GST Council in its next meeting in New Delhi next week.

If accepted, the move will be seen as a recognition of the cultural and economic importance of handloom weaving and silk production, both of which are integral to India’s heritage and export basket.