Centre to define what makes goods handicraft products

NEW DELHI: Curio shops will soon find it tough to pass off anything and everything as a piece of handicraft.
With handicraft exporters facing problems related to duties and taxes, the government has pushed for what will be defined as "handicrafts". According to the preliminary definition, any product that is primarily made by hand -- even though some machinery might have come to aid -- and appeals to the eye due to its artistic, creative or ethnic characteristics can be put into the category of handicrafts.But there is another condition -- the product might not have any functional utility and could be used as a decorative item or gift.
The proposed definition on which public comments have been sought draws upon the international classification and more crucially a Supreme Court order, which is at the root of the issue.
Exporters said that following the SC judgment, regulatory agencies and customs authorities started using discretionary powers to transfer the case to classification committees to ascertain how much duty should be levied.
Besides, they were facing difficulties in getting refund of taxes and duties, something that they are entitled to for exported consignments.
Though the issue has been referred to various government agencies, including the customs department, the issue has not been resolved satisfactorily, exporters said.
The proposed definition follows a study conducted by the textiles ministry and the Export Promotion Council for Handicrafts (EPCH).
Though the value of Indian handicraft exports is not very significant in the overall scheme of things, it is a large employment generator. During the last financial year, the value of handicrafts was estimated at Rs 8,719 crore, compared to a little over Rs 8,150 crore in 2008-09. The US is the largest market for Indian handicraft exporters, accounting for 28.55% of the total handicraft exports in 2009-10, followed by the UK (10.64%).