 Fashion products having more than 50 percent handloom and handicraft inputs should be exempted from the Value-Added Tax (VAT), in order to make them competitive in the global market, urged the Associated Chambers of Commerce and Industry (Assocham) to the government.
Indian fashion industry is a blooming industry, but accounts for mere 0.3 percent of international industry’s net-worth and which may not thrive further without government’s necessary support, wrote Assocham in a letter to the finance ministry.
8 to 12 percent of VAT on fashion products is making them costlier, so there is a need to remove VAT on the handloom and handicraft-based fashion products, as per Assocham, which expects fashion design industry to reach Rs. 8 billion from Rs. 3 billion in two to three years.
Due to the lethargic market environment and market dynamism, it’s quite difficult to establish self-sustaining fashion hubs in the country, at present. Hence, the industry needs government’s support particularly in the form of tax incentives and funding assistance, said the trade body.
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