GST Rate for Wood & Handicraft Sector

The recent GST rate revisions have brought significant changes to sectors like wood and handicrafts — industries that not only drive employment but also represent India’s cultural and ecological heritage. With rates being reduced from 12% to 5%, businesses in these sectors are likely to experience cost advantages, encouraging innovation, expansion, and greater market participation. These changes aim to promote sustainable practices, improve affordability, and enhance export potential while supporting artisans and small manufacturers.

In this section, we’ll explore how the revised GST rates impact the wood and handicraft industries, providing insights into opportunities, challenges, and ways businesses can adapt to this evolving tax structure.

(12% to 5%)

S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
1.	44 or any Chapter	The following goods, namely: — a. Cement Bonded Particle Board; b. Jute Particle Board; c. Rice Husk Board; d. Glass-fibre Reinforced Gypsum Board (GRG) e. Sisal-fibre Boards; f. Bagasse Board; and g. Cotton Stalk Particle Board h. Particle/fibre board manufactured from agricultural crop residues
2.	4404	Hoopwood; split poles; piles, pickets and stakes of wood, pointed but not sawn lengthwise; wooden sticks, roughly trimmed but not turned, bent or otherwise worked, suitable for the manufacture of walking-sticks, umbrellas, tool handles or the like
3.	4405	Wood wool; wood flour
4.	4406	Railway or tramway sleepers (cross-ties) of wood
5.	4408	Sheets for veneering (including those obtained by slicing laminated wood), for plywood or for similar laminated wood and other wood, sawn lengthwise, sliced or peeled, whether or not planed, sanded, spliced or end-jointed, of a thickness not exceeding 6 mm [for match splints]
6.	4409	Bamboo flooring
7.	4415	Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums of wood; pallets, box pallets and other load boards, of wood; pallet collars of wood
8.	4416	Casks, barrels, vats, tubs and other coopers’ products and parts thereof, of wood, including staves
9.	4417	Tools, tool bodies, tool handles, broom or brush bodies and handles, of wood; boot or shoe lasts and trees, of wood
10.	4418	Bamboo wood building joinery
11.	4420	Wood marquetry and inlaid wood; caskets and cases for jewellery or cutlery, and similar articles, of wood; statuettes and other ornaments, of wood; wooden articles of furniture not falling in Chapter 94
12.	4421	Other articles of wood; such as clothes hangers, Spools, cops, bobbins, sewing thread reels and the like of turned wood for various textile machinery, Match splints, Pencil slats, Parts of wood, namely oars, paddles and rudders for ships, boats and other similar floating structures, Parts of domestic decorative articles used as tableware and kitchenware [other than Wood paving blocks, articles of densified wood not elsewhere included or specified, Parts of domestic decorative articles used as tableware and kitchenware]
13.	4502 00 00	Natural cork, debacked or roughly squared, or in rectangular (including square) blocks, plates, sheets or strip (including sharp-edged blanks for corks or stoppers)
14.	4503	Articles of natural cork such as Corks and Stoppers, Shuttlecock cork bottom
15.	4504	Agglomerated cork (with or without a binding substance) and articles of agglomerated cork

Handicraft Sector

(12% to 5%)

S. No.	Chapter / Heading / Sub-heading / Tariff item		Description of Goods
1.	44, 68, 83		Idols of wood, stone [including marble] and metals [other than those made of precious metals]
2.	6802		Statues, statuettes, pedestals; high or low reliefs, crosses, figures of animals, bowls, vases, cups, cachou boxes, writing sets, ashtrays, paper weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone
3.	6913		Statues and other ornamental articles
4.	9601		Worked ivory, bone, tortoise shell, horn, antlers, mother of pearl, and other animal carving material and articles of these materials, articles of coral (including articles obtained by moulding)
5.	9701		Paintings, drawings and pastels, executed entirely by hand, other than drawings of heading 4906 and other than hand-painted or hand-decorated manufactured articles; collages, mosaics and similar decorative plaques
6.	9702		Original engravings, prints and lithographs
7.	9703		Original sculptures and statuary, in any material
8.	9705		Collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archaeological, paleontological, ethnographic or numismatic interest [other than numismatic coins]
9.	9706		Antiques of an age exceeding one hundred years
10.	3406		Handcrafted candles
11.	4202 22,4202 29, 4202 31 10, 4202 31 90, 4202 32,4202 39		Handbags including pouches and purses; jewellery box
12.		4416, 4421 99 90	Carved wood products, art ware/decorative articles of wood (including inlay work, casks, barrel, vats)
13.		4414	Wooden frames for painting, photographs, mirrors etc
14.		4420	Statuettes & other ornaments of wood, wood marquetry & inlaid, jewellery box, wood lathe and lacquer work [including lathe and lacquer work, ambadi sisal craft]
15.		4503 90 90 4504 90	Art ware of cork [including articles of sholapith]
16.		6117, 6214	Handmade/hand embroidered shawls of sale value exceeding Rs. 2500 per piece
17.		6802	Carved stone products (e.g., statues, statuettes, figures of animals, writing sets, ashtray, candle stand)
18.		68159990	Stone art ware, stone inlay work
19.		691200 10, 6912 00 20	Tableware and kitchenware of clay and terracotta, other clay articles
20.		6913 90 00	Statuettes & other ornamental ceramic articles (incl blue potteries)
21.		7009 92 00	Ornamental framed mirrors
22.		7018 90 10	Glass statues [other than those of crystal]
23.		7020 00 90	Glass art ware [ incl. pots, jars, votive, cask, cake cover, tulip bottle, vase ]
24.		7326 90 99	Art ware of iron
25.		7419 80	Art ware of brass, copper/ copper alloys, electro plated with nickel/silver
26.		7616 99 90	Aluminium art ware
27.		8306	Bells, gongs and like, non-electric, of base metal; statuettes, and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal; (including Bidriware, Panchloga artware, idol, Swamimalai bronze icons, dhokra jaali)
28.		940510	Handcrafted lamps (including panchloga lamp)
29.		940150, 9403 80	Furniture of bamboo, rattan and cane
30.		9503	Dolls or other toys made of wood or metal or textile material [incl wooden toys of sawantwadi, Channapatna toys, Thanjavur doll)
31.		9504	Ganjifa card
32.		9601	Worked articles of ivory, bone, tortoise shell, horn, antlers, coral, mother of pearl, seashell other animal carving material
33.		9602	Worked vegetable or mineral carving, articles thereof,
			articles of wax, of stearin, of natural gums or natural resins or of modelling pastes etc, (including articles of lac, shellac)
34.		9701	Hand paintings drawings and pastels (incl Mysore painting, Rajasthan painting, Tanjore painting, Palm leaf painting, basoli etc)
35.		9703	Original sculptures and statuary, in metal, stone or any material
36.		4802	Handmade Paper and Paper board

Impact on the Wood Sector

1. Affordable Construction and Packaging Materials:
Items like particle boards, rice husk boards, bamboo flooring, and packing crates are now subject to lower taxes. This benefits manufacturers by reducing input costs and boosting demand in the construction, furniture, and packaging industries. Eco-friendly alternatives like cotton stalk and bagasse boards are expected to see wider adoption, aligning with sustainability trends.

2. Boost for Traditional Woodcraft:
Products such as railway sleepers, wooden tool handles, and decorative veneers will now be more cost-effective. This gives small-scale producers and regional manufacturers an edge in competing with larger industrial players, fostering grassroots entrepreneurship.

3. Expansion of Eco-Friendly and Modular Solutions:
With lower rates on wood-based materials, businesses are likely to explore modular furniture, pre-fabricated structures, and lightweight construction solutions — sectors that are increasingly important in urban development and disaster-resilient architecture.

Impact on the Handicraft Sector

1. Supporting Artisans and Heritage Crafts:
The reduction in GST rates for hand-made items, from wood idols to stone and metal artifacts, provides much-needed relief to artisans operating in rural and semi-urban areas. This could help in reviving traditional crafts and encouraging new generations to join these sectors.

2. Growth in Exports and Niche Markets:
Handcrafted products such as terracotta items, brass art ware, and lacquer work are increasingly sought after in international markets. Lower taxes on these products enhance their price competitiveness, helping exporters tap into luxury and lifestyle segments.

3. Encouraging Innovation and Diversification:
With reduced taxation, artisans and small enterprises may invest more in creative designs, packaging, and marketing strategies. The affordability factor also allows manufacturers to explore new product lines like eco-friendly décor, sustainable furniture, and artisanal gift items.

4. Preservation of Cultural Identity:
The handicraft sector plays a crucial role in preserving India’s cultural heritage. Lower GST rates will make traditional art forms more accessible and affordable, encouraging both domestic and global appreciation.