Gram Seva Sangh
WHY ‘ZERO TAX’ ?
An interim report submitted by a committee
constituted by Gram Seva Sangh
Prof Ashis Nandy, Social theorist
Uzramma, President, Federation of All India Handloom Organisations
Shyam Benegal, Film Maker
Leo Saldana, Environmental Activist
Suresh JK, Lok Vidya Jan Andolan
Chockalingam M, Industrialist
Ajay Kumar Singh, Retd Dir.General Police of Karnataka
P V Rajgopal, Founder Ekta Parishad
Dr. Rajendra Singh, The Waterman of India
Macherla Mohan Rao, Founder of Rastra Chenetha Jana Samakhya
Shivakumar P, Cost Accountant
Dr.A.R.Vasavi, Punarchith Foundation, Ex Dean NASI
Dr. Chandrashekar Pran, President, Vardan Foundation Allahabad
In the past, all human production was made by the hand. Now, most production happens through the machine. Hand production, like wildlife, is facing extinction. What that means is the extinction of the human race itself. For, machine production is highly carbon intensive, environmentally and even morally degrading. The machine culture has brought serious disruption into our social and cultural life. The machine has made millions of people jobless. It has made the majority poor and a minuscule minority vulgarly rich. The machine culture has made the human being a slave of the marketplace and set in a new disease called consumerism.
The great Indian tradition
Indians have always been great handcrafters. For example, we were once a rich nation through the export of our cotton handlooms. We made the handmade product a symbol of our protest against the colonial rule. We had declared the principles of Swadeshi and Gramswaraj as our tool to build a modern democratic India. Our national flag, even today, is made by the hand.
Machine culture is a world phenomenon
Machine production and consequent degradation of human civilization is a worldwide phenomenon. We in India had tried to control this phenomenon by adopting the principle of positive discrimination for the handmade. This principle maintained a balance between the manmade and machine-made, rural and urban, rich and poor, tradition and modernity.
The anti-Rural stance of GST
For the first time since independence, a tax has been imposed on all handmade products. Khadi, handloom, handicrafts, all are taxed under the new Goods and Services tax (GST) regime. Rural sector, already distressed, will take a turn for the worse. It is a topsy-turvy regime. Luxury products have become cheaper, while handmade products have become expensive. Cars and cigarettes cost less, while a Khadi saree, a handloom kurta, a mat, pot and plough shall cost more from now on.
A handmade product is naturally expensive
Handmade products are “naturally” expensive. A Khadi saree, for example, costs more than a synthetic saree from Surat. It is going to become even more expensive now. And lose even more market share. You could say, “So what? Let it lose. That which cannot survive in the marketplace need not survive.” No, you cannot say that!
Even for our own survival, we need to protect the rural enterprise. Handmade is environment-friendly. Handmade is, almost entirely, carbon neutral. If we want global warming to be reversed, if we want environmental degradation to be halted, and more importantly, if we do not want hordes of displaced villagers to descend on the “smart city”, we must support handmade products.
Gram Seva Sangh is leading a ‘TAX DENIAL’ satyagraha against the imposition of GST on handmade products. This we believe is the second tax denial satyagraha. The first was in 1930, when we had fought the British against an inhuman tax on salt. Nearly a century later, we are compelled to launch a second tax denial satyagraha against our own government for levying an inhuman tax on rural products.
Saint Tradition and Handcrafting
To protect handmade is to protect the moral fiber of this country. For, there is a profound relationship between handcrafting and morality in the Sant Parampara, the saint tradition of India. Sant Ravidas, SantKabir, Sant Kanakadasa and Vachanakara Sants were all handcrafting people. The frugal economics of handcrafting, social equity and the virtues of simple living are the three fundamental tenets of the Sant Parampara of India. Today, that Parampara is in danger.
Politics of the market
Britain had enslaved India as much through the gun as through the capitalist industry; as much through politics as through commerce. They came as merchants, became our rulers, plundered our natural resources, brought machine made products, and forcibly sold them to us.
They did so through tax manipulations. Handmade was taxed heavily while the British machine was given huge concessions. It was a standard trick. The same trick is being played by our governments now.
GST, created jointly by all state governments and the central government is both disruptive and wrong. It only serves automation that is spreading death across the globe by destroying the nature, the environment and the hand skill.
Handmade Was Profitable
There was a time when we obtained everything, clothing transport food utensils everything, handmade. These products were exported. They earned gold. We were not poor then. The British came to India not seeking poverty, but gold.
What is Swarajya, What is Swadeshi?
Swarajya is not mere border counting. Swarajya is not Hinduism, nor is it Islamism,nor it is Patriotism. Swarajya means governing the self. Uniting all the self-governed is true Swarajya. But, Swarajya and Swadeshi got distorted somewhere on the way. The distortion began with partition. Politicians who partitioned this country, on the basis of religion, were responsible for this distortion. Let us not forget that the poor Hindu and the poor Muslim are both, predominantly, farmers and craftsperson’s. They built Swadeshi through hand production.
We have all failed!
We, the Hindus, the Muslims, the Christians, all jointly became slaves of automation. We all became irreligious in the process. Congress committed this mistake. BJP is now committing the same mistake. There is no point in blaming each other. Let us join hands and correct the mistake.
This Satyagraha is a consumer atonement movement. We the consumers shall protest, by selling handmade products publicly, without either paying or collecting tax. This is civil disobedience as well. We are willing to face the law, but shall not give up the Satyagraha until the tax is rescinded.
Definition of handmade
“Any product that uses not less than two thirds hand process including operated instruments (such as a loom, a plough) and not more than one third machine processed can be considered as handmade”.
- The turnover limit for Individuals and Self Help Groups (SHGs) producing handmade products need to be increased to INR 50 Lakhs from the present limit of INR 20 Lakhs (subject to periodic review).
- All handmade products produced and marketed by their Co-operative Societies and Federations should be subject to Zero Tax with no limit of turnover under the current GST regime.
It shall give an impetus to the rural economy to be competitive in the market.
It shall encourage self-employment in rural India.
It shall in turn add fuel to ‘Make in India’ movement.
It shall help in reviving and stabilizing the lost/fast vanishing Indian heritage artistic products
Government to form “Handmade Board” (similar to Khadi & Village Industries Board), build in governance framework and regulate the rural industry through registered Co-operative Societies and Federations.
All Input Purchases made through such registered Co-operative Societies and Federations should be subjected to Zero Tax. Similarly, all Sales made by the these organisations should also be at Zero Tax to consumers
A Concurrent List
handmade/naturally made products and services
Agriculture Sector – Food Products
Handmade Butter and Other Fats
Natural Birds’ eggs in Shell
Natural Edible vegetables, roots and tubers
Natural Edible fruits and nuts
Handmade Cane Jaggery, Beet Sugar, Cane Sugar, Khandsari Sugar
Handmade Palmyra sugar
Handmade Puffed Rice
Natural Non alcoholic (Toddy & Neera)
Natural Tender Coconut water
Natural Oil seeds and oleaginous fruits
Handmade Vegetable fats and oils
Handmade Edible fats; animal or vegetable waxes
Handmade Vegetable & Fruit Jams, Pickles, Sauces
Handmade Icecream, Food mixes including Instant mixes
Handmade Sweet Biscuits and other Biscuits
Agriculture Sector – Non Food Products
Natural Live trees and other plants
Natural bulbs, roots and the likes
Natural cut flowers and ornamental foliage
Natural Vegetable plaiting materials; Vegetable products
Natural Aquatic feed, poultry feed, cattle feed
Natural Organic Manure
Raw hides, skins, tanned or crust hides and skins, not further prepared
Light Fishing vessels; factory boats and other vessels for processing or preserving fishery products.
Natural Lac; gums, resins and other vegetable saps and extracts
Cocoa and cocoa preparations
Natural rubber, balata, gutta-percha, guayule, chicle and similar natural gums, in primary forms or in plates, sheets or strip
Handmade Dress Material
Handmade Home Furnishings
Handmade Sacks & bags
Handmade Coir mats, matting and Floor covering
Natural Tanning or dyeing extracts; tannins and their derivatives
Natural dyes, pigments and other colouring matter
Handmade Sanitary towels, tampons, sanitary napkins, clinical diapers
Handmade Silk yarn, Cotton yarn, khadi yarn, Wool, fine or coarse animal hair; horse hair yarn and woven fabric
Handmade Other vegetable textile fibres; paper yarn, woven fabrics of paper yarns
Handmade Man-made filaments; strip the like of man-made textile materials
Handmade Manmade staple fibres
Handmade Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof
Handmade Carpets and other textile floor coverings
Handmade Hats and other headgear
Handmade Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery
Handmade Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use
Handmade Knitted or crocheted fabrics
Handmade Articles of apparel and clothing accessories, knitted or crocheted or otherwise
Handmade Other made up textile articles, sets, worn clothing and worn textile articles; rags
Handmade Metal Crafts
Handmade Wood Crafts
Handmade Leather Crafts
Handmade Glass & Ceramics
Natural Fibre Crafts
Handmade Stone Craft
Handmade Terracotta (Pottery)
Handmade Dolls, Toys & Other Crafts
Hand block Printing
Handmade Printing Embroidery Craft
Handmade Musical Instruments
Hanmade Bamboo Crafts
Handmade safety matches
Handmade Agarbatti & other Odoriferous
Handmade Essential oils and resinoids
Handmade toilet & washing preparations
Handmade Candles and similar articles
Handmade Tableware, kitchenware, other household articles and Hygiene or toilet articles
Manufactures of straw, Basket-ware and wickerwork
Handmade Paper Crafts
Handmade Carton boxes
Handmade Boxes, pouches, wallets
Handmade Exercise book, graph book, & laboratory note book
Handmade Envelopes, letter cards, plain postcards
Handmade Registers, account books, note books, order books, receipt books, letter pads, memorandum pads, diaries and similar articles,
Handmade Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding- crops and parts thereof
Handmade Prepared feathers and down and articles made of feather or of down – artificial flowers; articles of human hair
Handmade Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry
Handmade Coir products
Handmade Hurricane lanterns, Kerosene lamp/ lantern, petromax, glass chimney, accessories & components thereof
Handmade Broomsticks and Muddhas made of sarkanda, phool bahari jhadoo
Handmade Pencils, crayons, pastels, drawing charcoals, writing or drawing chalks and tailor’s chalk
Handmade Footwear gaiters and the like; parts of such articles
Services by way of job work in relation to; Printing of newspapers; Textile yarns (other than of man-made bres) and textile fabrics; Cut and polished diamonds; precious and semi-precious stones; or plain and studded jewellery of gold and other precious metals, falling under Chapter of HSN; Printing of books (including Braille books), journals and periodicals; Processing of hides, skins and leather falling under Chapter 41 of HSN
Services by way of admission to exhibition of cinematograph films where price of admission ticket is one hundred rupees or less.
Job work in relation to manufacture of umbrella
Job work in relation to manufacture of clay bricks falling under CTH 69010010
Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly
Supply of Food/drinks in restaurant not having facility of air-conditioning or central heating at any time during the year and not having licence to serve liquor.
Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act
Cultural Performance Sector
Services by way of admission or access to circus, Indian classical dance including folk dance, theatrical performance, drama
Services by an artist by way of a performance in folk or classical art forms of- (a) music, or (b) dance, or (c) theatre, if the consideration charged for such performance is not more than one lakh and fifty thousand rupees: Provided that the exemption shall not apply to service provided by such artist as a brand ambassador.