The panel’s recommendations will be submitted to the Central Board of Indirect Taxes and Customs (CBIC), which administers customs and indirect tax matters under the Department of Revenue, Ministry of Finance. CBIC is responsible for examining issues related to tariff classification, customs procedures, and implementation of indirect tax laws. The Board may consider the panel’s proposals and initiate appropriate examination, clarification, or further action in line with the applicable legal and tariff framework.

 

The expert panel comprises Sheikh Ashiq Ahmad – Member, Committee of Administration (COA), CEPC, Piyush Kumar Baranwal – Member, COA, CEPC and Mehraj Yasin Jan – Member, COA, CEPC.

 

This initiative aims to protect the identity and market value of India’s handmade carpet industry. While handmade carpets already enjoy recognised classifications under the tariff system, machine-made carpets are sometimes classified or marketed as handmade products due to inadequate differentiation within the existing classification structure.

 

During deliberations, Mr. Sheikh Ashiq Ahmad apprised the panel of the difficulties faced by handmade carpet manufacturers and exporters. He emphasised that handmade and machine-made carpets differ significantly in production methods, employment generation, craftsmanship, artistic value, and market positioning.

 

“The lack of a clearly identifiable and separate classification for machine-made carpets creates scope for such products to be sold or represented as handmade.Click Here To Follow Our WhatsApp ChannelThis affects genuine artisans, manufacturers, and exporters and weakens the distinct identity of India’s handmade carpet industry,” said Mr. Ahmad.

 

He further noted that substantial stocks of genuine handmade carpets remain unsold in warehouses because machine-made products are often offered in the market at considerably lower prices while being misrepresented as handmade carpets.

 

“It is essential to segregate machine-made carpets from the existing handmade carpet classifications and provide them with a separate HSN code. This will ensure transparency, protect customers from misrepresentation, and provide fair market opportunities to genuine handmade carpet producers,” he added.

 

The expert panel will undertake a detailed examination of the existing classification of carpets and other textile floor coverings under Chapter 57 of the Customs Tariff. It will prepare a comprehensive representation outlining the economic, commercial, and employment-related reasons for introducing a distinct HSN classification for machine-made carpets.

 

CEPC believes that a separate HSN code for machine-made carpets will prevent their misclassification as handmade products, improve the accuracy of trade data, enhance market transparency, and safeguard the interests of artisans, weavers, manufacturers, and exporters associated with India’s handmade carpet sector.

 

The Council will submit the panel’s recommendations to CBIC for its consideration and appropriate action. (KNS)