GST Weaves A Bitter Tale For Thousands of Karnataka Artisans

With the implementation of GST, the livelihood of lakhs of artisans across Karnataka is at risk.

During his visit to India in 2015, former US president Barack Obama was gifted toys made by artisans of Channapatna town, located around 60 kilometres from Bengaluru.

Two years later, Channapatna artisans are now on tenterhooks over the Goods and Service Tax (GST) regime, under which these traditional toys attract a tax rate of 12 percent. Under the Value Added Tax (VAT) system, most handmade products were taxed 5.5 percent.

A Channapatna toy that would have cost Rs 63.3 is now available for Rs 67.2 – after a 50 percent increase in tax. 

These colourful handmade toys are among many other products reeling under the pressure of increased tax rates endangering the livelihoods of thousands of artisans dependent on these age-old crafts. “GST has added to the woes of the already dwindling handicraft industry. If the current rates continue to hold good, more and more craftsmen of Channapatna might give up the profession and migrate elsewhere in search of a lucrative job. The only way forward to preserve the art is by reducing the tax liability or bringing it down to zero,” said Murali, a sales representative of Maaya Organic.

The Buried Platoons of Clay

The practitioners of Terracotta, a form of handmade art made out of clay, have preserved their craftsmanship for long. Several disjointed communities have inherited the artisanship across the state, including in Kolar, Tumakuru and Bengaluru.

Terracotta products were exempted from tax before the implementation of GST. But now, they have been classified under the 18 percent and 28 percent slabs. For instance, a terracotta lamp under the new regime will cost Rs 141.6 as opposed to the earlier price of Rs 120.

The worst hit are the artisans. With supply exceeding demand, the economic returns entailed in making terracotta items has drastically reduced after GST came into the picture.

Shalini Saha, sales representative of Kalaaplanet

Woodworkers Under the Axe

The city of Mysuru in Karnataka has a large number of artisans engaged in wood carving and inlay work, a tradition starting from the era of Tipu Sultan. The sale of these handmade furniture, especially rose and teak wood carvings, is enduring the mortal blow of GST.

The tax on rosewood products has doubled from 14 percent to 28 percent. If the price before tax of a rosewood article is Rs 1,00,000, it would have been sold for Rs 1,14,000 under VAT. With GST, it comes at the price of Rs 1,28,000.

Kasali, a salesperson at Prachin Arts and Crafts in Bengaluru, said that customers have been cancelling orders abruptly and refusing to pay the high amount of tax. The situation is similar in most of the handicraft emporiums and stores. “We have seen a decline of as much as 50 percent in our monthly sales numbers,” she said.

Handmade fragrances is another item that has been hit by GST. Artisans use extracts of flowers, roots, trees and leaves to make scents.

It is not only the artisans who are being affected. Most of the small-scale and rural artisans are not even formally registered under GST due to which dealers end up paying more.

Ravi, Supervisor at Basava Ambara

A hunger strike and satyagraha spearheaded by Prasanna, a theatre personality, was held in Bengaluru over the last few days. Following the protest, a petition was filed by Chief Minister Siddaramaiah urging the GST Council to implement zero percent tax on handmade products, specifically for artisans in rural areas and their federations.

(Breathe In, Breathe Out: Are you finding it tough to breathe polluted air? Join hands with FIT to find #PollutionKaSolution. Send in your suggestions to [e-mail] or WhatsApp @ [phone])