Indian Government Slashes GST Rates on Imitation Zari Thread, Boosting Artisans and Traditional Garments

In a significant move aimed at bolstering India’s artisans and traditional garment industry, the Goods and Services Tax (GST) Council has decided to reduce the GST rates on imitation zari thread from 18 percent to 5 percent. This momentous decision was reached during the 50th GST Council meeting held in New Delhi yesterday, under the leadership of finance and corporate affairs minister, Nirmala Sitharaman.

The proposed tax rate reduction on imitation zari thread, a textile intermediate product extensively used in various handicrafts and traditional Indian garments, is expected to have far-reaching implications for the industry. By significantly reducing the tax burden, the government aims to promote the growth and development of artisans engaged in the production of handicrafts and traditional garments, fostering a thriving ecosystem of skilled craftsmanship.

The move aligns with the Indian government’s commitment to preserving and promoting the rich heritage of Indian textiles, which have been an integral part of the country’s cultural tapestry for centuries. The reduction in GST rates is anticipated to make these products more affordable for consumers, both domestically and globally, thereby driving increased demand and providing a much-needed impetus to the sector.

Alongside the tax rate reduction, the GST Council has also recommended the regularisation of past GST payments related to imitation zari thread on an ‘as is’ basis. This step aims to alleviate any concerns and provide clarity to businesses regarding their previous tax obligations, ensuring a smoother transition under the revised GST structure.

In another important decision, the Council clarified that the supply of raw cotton, including kala cotton, by agriculturists to cooperatives falls under the taxable category through the reverse charge mechanism. This move aims to streamline compliance procedures and enhance transparency in the cotton supply chain.

The ministry of finance highlighted that the GST Council meeting also witnessed discussions on various measures to streamline GST compliances, emphasizing the government’s commitment to ensuring a more efficient and business-friendly tax regime.

The reduction in GST rates on imitation zari thread and the regularisation of past GST payments will undoubtedly provide a boost to artisans and weavers across the country. Their exceptional skills and craftsmanship, which have been honed over generations, will now receive greater support and recognition, enabling them to flourish in a competitive market.

The Indian government’s proactive steps towards reducing the tax burden on key textile products not only contribute to the growth of the industry but also strengthen India’s position as a global hub for traditional garments and handicrafts. This move showcases the government’s commitment to nurturing and preserving India’s rich cultural heritage while fostering economic development and empowering skilled artisans.

With the revised GST rates set to come into effect, the future looks promising for the artisans and weavers who will be able to showcase their exquisite creations to a wider audience, both within India and across the globe.



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