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Understanding GST for Handicrafts

Nishant Chauhan 0

Rural Craftsmen and Artists who were ready to showcase their products online are in tizzy. The problem is, they can either use their skills to produce the handmade goods or learn the complexities of  GST. GST has become very complex for these handicraft artists and sellers.

Many artisans have been outspoken that GST will paralyze the industry & kill the sector. This is mostly because of lack of education, empowerment of Craftsmen/Artist is at stake.

Taxonomy on Handicraft Industry.

  • On items like idols of clay GST has been reduced from 28 % ↓12 %. Also people with idol business of worth Rs 20 lakhs do not need to register with GST.
  • Only 5 %tax on cotton quilts worth up to Rs 1000. Cotton quilts worth more than that will be levied 12% And5 % which was levied on cotton sports has been removed.
  • Works of art, collectors’ piece and antiques at 12%All goods.

GST impact on exports of handicrafts:-

Though there was no tax liability on exports of handicrafts but with the new regime exports are liable to IGST and there are two options with the handicraft exporter

  1. Pay IGST before exporting the goods.
  2. Use LUT and Bonds for exporting the goods.

Some facts pertaining to handicraft exports

  • In case of supply by an unregistered person, the registered person i.e., the exporter shall be liable to pay GST under reverse charge mechanism for purchases. above five thousand rupees in a day. However, the exporter can avail ITC of such GST paid and either utilize the ITC or claim the refund.
  • The IGST can be paid by utilizing ITC to the extent available and balance by cash.
  • GST be payable on goods not intended to be sold, taken out for participation in overseas exhibitions and trade fairs and brought back into India as these goods are meant for exhibition only.
  • Refund can be claimed by filing an application electronically in the prescribed form along with required documents through the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner.
  • The refundable amount shall be electronically credited to any of the bank accounts. The refundable amount shall be sanctioned within 60 days from the date of receipt of application complete in all respects.

Naapbooks has been specifically designed to provide an easy interface to its users. Be it an experienced accountant or a startup innovator. or maybe an Artisan or be a handicraft seller. The system of accounting has been modeled to save time and resources. The users can even file their GST returns from Naapbooks with just one click.

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