VAT on carpets a setback to exporters in Kashmir: CCEPC

VAT on carpets a setback to exporters in Kashmir: CCEPC

Urging Union Textile and Commerce ministry to exempt the carpet industry from VAT and Sales Tax, Chairman Carpet Export Promotion Council (CEPC), Ashok Jain Friday said the imposition of tax was a “set back” for the carpet exporters in Kashmir.

Jain was speaking at a meeting of the Kashmir carpet exporters here organised by Kashmir Chamber of Commerce and Industry. This is for the first time that CEPC has visited Kashmir.

Jain said even as the handicraft products were exempted under VAT/ST by union ministry, the VAT/tax was imposed on carpets, hence creating problems for artisans, dealers and exporters.

“If we go by the definition of the handicraft products, then carpets, which are handmade products are to be include in the handicraft sector. Authorities need to reconsider their decision and declare carpet industry exempted under VAT/Tax so as to help the industry flourish and compete at the international market,” Jain said.

He said exempting the carpets from the VAT would help its production and demand to grow, hence creating maximum chances for employment.

The rupee appreciation during past few months, Jain said, also hit the carpet industry and was a concern for exporters.
 “We demand a special relief package for carpet industry to overcome the losses suffered due to the rupee appreciation,” Jain said.

He said in India the carpet industry had to pay annual interest rates of 10-15 percent on exports while the governments in neighboring countries like China, Iran were imposing five to six percent annual interest on its export. “If the authorities want our carpet industry to grow rapidly it is a must for them to lower the annual interest rates and provide five percent of pre-shipment and post-shipment subsidy to the carpet industry,” Jain said.

Assuring the carpet exporters and artisans here to raise their genuine problems with the authorities concerned in New Delhi, Jain invited the Kashmir carpet exporters to the upcoming international Carpet Expo Fair at Varanasi starting from October 17.

“Main purpose of our visit to Kashmir was to invite and encourage the exporters to Varanasi Carpet Expo fair. The fair will provide right platform for Kashmiri exporters to get exposed to the international market and understand the demands and trends of the market,” Jain said.

“We had a detailed discussion with the KCCI members and have assured our full support to them for addressing the problems faced by Kashmir carpet industry,” Jain said.

Vice Chairman of the CEPC, Mahi Prasad Sharma said crores of rupees were annually announced for carpet industry in India but nobody knew where this money went.

He stressed the artisans here to use quality raw material for carpet production. “Kashmiri carpet has its own name in the international market. In fact the word Kashmir attached to any product increases its value at both domestic and international markets. Now it is the responsibility of the artisans, exporters, and dealers here to maintain the standards of Kashmiri brand,” Sharma said and assured the participants of holding fair in Kashmir in coming two years.

Members of CEPC said J&K was a traditional handicraft state famous for its exquisite high quality hand knotted silken, woolen, and artificial (staple) carpets.

Kashmiri carpets were symbolic of quality and finesse and “we are here to pay special attention to the problems faced by the exporters and manufacturers while making the priceless carpets,” the members said.

Speaking on the occasion president KCCI Dr Mubeen Shah, the KCCI had raised several issues related to the carpet industry with the CEPC and “we are hopeful they will help us out of the problems.”