New Delhi: As per the feedback received from the President/ Hony. Secretary of Carpet Manufacturers and Exporters Associations - All India Carpet Manufacturers Association, Bhadohi, Eastern U.P. Exporters Association, Varanasi, Agra Carpet Manufacturers Association, Agra, Rajasthan Carpet Manufacturers and Exporters Association, Jaipur, Panipat Carpet Manufacturers Association, Panipat, Indian Floor Covering Exporters Association, Delhi Exporters Association, Kashmir Chamber of Commerce & Industry, Kashmir Handicrafts Manufacturers & Exporters Association - the Exports of Handmade Carpets and other floor coverings has affected badly due to imposition of 18% GST on Job Works and 12% GST on Sale/ Purchase on these items consequent upon implementation of Goods and Service Tax (GST) from 1st July, 2017.

The mainimpact are as under :  

Almost 5000Units has been inoperative and are on the verge of closure. Most of these microand small enterprises are spread all across the carpet weaving belts. 

As perestimates the exports of around Rs. 1000 Crores have suffered on account ofclosure of these production units. No new orders are being executed and theweaving has almost come to a complete closure for new orders. The old ordersand old stock is also not moving out of fear of imposition of tax, not gettingincreased price from buyer’s due to old contracts and worry on losing money. 

IndianCarpets loosing its competitiveness and sheen in the International Market.Other countries like China and Turkey set to benefit and fill the space left bythe Indian handmade carpets. And machine-made carpets will quickly fill thelower end of the market and will be imported heavily in India and will add tothe imbalance in the foreign exchange and balance of payment.  

Export Ordersworth Rs. 2,000 Crores have been cancelled as importers refused to incrementalcost as world market on luxury goods continues to struggle.  

This hasaffected the livelihood of around 20 lakhs of workers and their families in theCarpet producing belts viz; Bhadohi, Mirzapur, Varanasi, Ghosia, Aurai, Agra,Sonbhadra, Saharanpur, Sahajanpur, Jaunpur etc. in U.P., Jaipur, Tonk, Bikaneretc. in Rajasthan, Panipat, Sonepat, Karnal in Haryana, Baramullah, Pandipur,Anantnag, Badgam, Leh, Pulwama, Kupwara, Pattan, Kanihama, Srinagar etc. inJ&K, etc. etc.  

India whichis currently holding No. 1 position in the World Market in area and dollarterms both, will lose its present position to other competing countries likeChina, Iran, Turkey, Pakistan and Nepal.

TheChairman, Carpet Export Promotion Council (CEPC), Sh. Mahavir Sharma aka RajaSharma is veryoptimistic of the government coming to the rescue of the 20 lakhs plus weaversin far flung rural areas of UP and Rajasthan and also that of all small and mediummanufacturers and exporters across various cities in UP, J&K, Haryana andRajasthan. He, along with his board of directors at the CEPC, has been tryingvery hard to lobby and convince the GST council and all its members.

He ishopeful that the GST on job work in carpet weaving like khadi will be broughtdown to 0%, as this is the only rural employment provider which 100% hand workand provides the much-needed extra income to formers in times of drought,floods or in between crops. Also, small traders and subcontractors will benefitif the GST on carpets was also brought down to 5% from 12%. 

The entirecarpet fraternity across India, while supporting the new GST law, is hopingthat the handmade carpet weaving and sales would be given a special lower rateto support rural craft based industry. The entire inustry is keeping a silentmarch in support of its 20 lakhs plus weaving community on the 19th of Julyacross all cities like Bhadohi, Jaipur, Srinagar, Panipat and Agra. Thousandsof manufactures and exporters led by industry stalwarts and leadersparticipated in the silent march. 

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