GST Tax Council today reduced tax rates on 29 items belonging to the Handicraft industry. This move is bound to bring relief to the manifold handicraft industry, just in time before the elections in Rajasthan, the Vidhansabha seat that BJP looks to retain, after its hard fought victory in Gujarat. The “Zero” rate will be applicable from 25 January.

The Handicraft industry in the state was hard hit by the implementation of GST on the handicraft items, which when implemented had seen a lot of resistance from members of the handicraft industry in Udaipur and elsewhere in Rajasthan. Gajendra Bhansali, a senior and much respected veteran of the industry from Udaipur, had said in October 2017 that the imposition of 5% tax under the VAT regime n 2015 by the Vasundhra government was also opposed by the industry and then the implementation of the 12-28% slab would ruin the industry and effect the livelihood of many artisans.

Hence this move by the government at the centre is the last straw that the government seeks to clutch as it looks to consolidating its position in the state, which with the current flow of anti government emotions, sounds difficult for it to retain power in the state. Vasundhara government will get tremendous help from this decision of the parent party at the center. Marta kya na karta is an apt idiom to this move of the government.

Arun Jaitley, the Finance Minister says that these 29 items will attract no tax and that the move has been taken to protect jobs in the hand-made industry, which accounts for an export of Rs 4,000 Crore each year. The reduction also affects rates on 53 services. FM added that bringing petroleum as well as other exempt goods under the GST umbrella is expected to happen in the next meeting of the GST Council. Handmade carpets have also been excluded from tax under the GST regime. The GST Council had put the handicraft items in the 12-18% tax slab.

e-Way bill provision will be effected from 1 February this year, when Rajasthan has already implemented the e-Way bill for goods moving to and fro the state. Fifteen states will implement the e-Way bill system, which, the FM says will mitigate tax evasion and systemize the transportation sector.

Infosys Chairman, Nandan NIlekani gave a detailed presentation during the meeting, presenting the simplification of the filing process, which was attended by a ministerial group comprising of Sushil Modi and the Aja Bhusan led IT committee of the government.