Reduction of GST Rate on Handicraft Goods

Reduction of GST Rate on Handicraft Goods

Notification No. 21/2018-Central Tax (Rate) dated 26.07.2018 has been issued giving effect to the recommendations proposed in the GST council meeting held on 21^st july, 2018.

This notification reduces the GST rates on several handicraft goods and shall be effective from 27^th July, 2018. It also explains the term Handicraft goods which is as following.

“For the purpose of this notification, the expression “handicraft goods” means – Goods predominantly made by hand even though some tools or machinery may also have been used in the process; such goods are graced with visual appeal in the nature of ornamentation or in-lay work or some similar work of a substantial nature; possess distinctive features, which can be aesthetic, artistic, ethnic or culturally attached and are amply different from mechanically produced goods of similar utility.”

This definition of Handicraft goods is similar and is in fact much wider than the one as defined in the landmark judgement given by the Supreme Court of India in the case of CCE, New Delhi Vs. Louis Shoppe & Anr. [1996 (83) ELT 13 (SC)] wherein it was held that wooden furniture by itself cannot be treated as handicraft unless and until it has a visual appeal in the nature of ornamentation or in-lay work or some similar work having artistic touch. Such ornamentation must be of a substantial nature.

In this definition of the Supreme Court, it says that work having artistic touch but the definition in the notification says that it can be Aesthetic, artistic, ethnic or culturally attached which is far much wider. And further, it does not mean that handicraft goods are only those which are exclusively made from hand, but it is clear from this notification that some tools or machinery can be used. Though the Apex court has also allowed use of machinery to some extent but it has wider import as it has widen the definition.

The following is the list of items for which the rates have been reduced.

S.No.	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
1.	3406	Handcrafted candles	6 %
2.	4202 22, 4202 29, 4202 31 10, 4202 31 90, 4202 32, 4202 39	Handbags including pouches and purses; jewellerybox	6 %
3.	4416, 4421 99 90	Carved wood products, art ware/decorative articles of wood (including inlay work,casks, barrel, vats)	6 %
4.	4414 00 00	Wooden frames for painting, photographs, mirrors etc	6 %
5.	4420	Statuettes & other ornaments of wood, wood marquetry & inlaid, jewellery box, wood lathe and lacquer work [including lathe andlacquer work, ambadi sisal craft]	6 %
6.	4503 90 90 4504 90	Art ware of cork [including articles of sholapith]	6 %
7.	4601 and 4602	Mats, matting and screens of vegetable material, basketwork, wickerwork and other articles of vegetable materials or other plaiting material, articles of loofah (including of bamboo, rattan, canes and other natural fibres, dry flowers (naturally dried), articles thereof, ringal, raambaan article, shola items, Kouna/chumthang (water reeds) crafts, articles of Waterhyacinth, korai mat]	2.5 %
8.	4823	Articles made of paper mache	2.5 %
9.	5607, 5609	Coir articles	2.5 %
10.	5609 00 20, 5609 00 90	Toran, Doorway Decoration made from cotton yarn or woollen yarn and aabhala (mirror) with or without hanging flaps	2.5%
11.	57	Handmade carpets and other handmadetextile floor coverings (including namda/gabba)	2.5 %
12.	5804 30 00	Handmade lace	2.5 %
13.	5805	Hand-woven tapestries	2.5 %
14.	5808 10	Hand-made braids and ornamental trimming in the piece	2.5 %
15.	5810	Hand embroidered articles	2.5 %
16.	6117, 6214	Handmade/hand embroidered shawls ofsale value not exceeding Rs. 1000 per piece	2.5 %
17.	6117, 6214	Handmade/hand embroidered shawls ofsale value exceeding Rs. 1000 per piece	6 %
18.	6802	Carved stone products (e.g., statues, statuettes, figures of animals, writing sets, ashtray, candle stand)	6 %
19.	6815 99 90	Stone art ware, stone inlay work	6 %
20.	6912 00 10 6912 00 20	Tableware and kitchenware of clay and terracotta, other clay articles	6%
21.	6913 90 00	Statuettes & other ornamental ceramic articles (incl blue potteries)	6 %
22.	7009 92 00	Ornamental framed mirrors	6 %
23.	7018 10	Bangles, beads and small ware	2.5 %
24.	7018 90 10	Glass statues [other than those of crystal]	6 %
25.	7020 00 90	Glass art ware [ incl. pots, jars, votive, cask, cake cover, tulip bottle, vase ]	6 %
26.	7113 11 10	Silver filigree work	1.5 %
27.	7117	Handmade imitation jewellery (including natural seeds, beads jewelry, cardamom garland)	1.5 %
28.	7326 90 99	Art ware of iron	6 %
29.	7419 99	Art ware of brass, copper/ copper alloys, electro plated with nickel/silver	6 %
30.	7616 99 90	Aluminium art ware	6 %
31.	8306	Bells, gongs and like, non-electric, of base metal; statuettes, and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal; (including Bidriware, Panchloga artware, idol, Swamimalai bronze icons, dhokra jaali)	6 %
32.	9405 10	Handcrafted lamps (including panchloga lamp)	6 %
33.	9401 50, 9403 80	Furniture of bamboo, rattan and cane	6 %
34.	9503	Dolls or other toys made of wood or metal or textile material [incl wooden toys ofsawantwadi, Channapatna toys, Thanjavur doll)	6 %
35.	9504	Ganjifa card	6 %
36.	9601	Worked articles of ivory, bone, tortoise shell, horn, antlers, coral, mother of pearl,seashell other animal carving material	6 %
37.	9602	Worked vegetable or mineral carving, articles thereof, articles of wax, of stearin, of natural gums or natural resins or of modelling pastesetc, (including articles of lac, shellac)	6 %
38.	9701	Hand paintings drawings and pastels (incl Mysore painting, Rajasthan painting,Tanjore painting, Palm leaf painting, basoli etc)	6 %
39.	9703	Original sculptures and statuary, in metal, stone or any other material	6 %

In the above table, Serial Numbers 2,4,6,10,11,12,13,14,19,22,24,25,28,29,30,32,35,37 are those items which were proposed by the council in the meeting and have now been notified. Apart from these, this notification reduces the rates for the items at serial number 1,3,5,7,8,9,15,16,17,18,20,21,23,26,27,31,33,34,36,38 and 39 which was not decided in GST council meeting. This is a very pleasing step from the government and is gladly acceptable.

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Reduction of GST Rate on Handicraft Goods

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