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Tamil Nadu rolls back VAT on fabrics
Jul '11
The government of Tamil Nadu has decided to rollback the 5 percent Value Added Tax (VAT) on fabrics. The July 12 order that imposed VAT was applicable to a range of fabrics and related products that fall under Schedule IV, section 3-10 of the VAT Act 2006.

The list of textile items that the State Cabinet has decided to exempt from VAT includes woven fabrics of silk, silk waste, cotton, artificial filament yarn, synthetic filament yarn, carded wool, staple fibre, synthetic staple fibre, cotton or man made fibres, woven pile fabrics and chenille fabrics of wool, terry towelling and related products.

A broad range of fabrics with industrial applications will also be exempted from VAT in the State.
The decision to exempt fabrics from VAT was taken after several representations were made by the textile sector seeking the same.

The textile industry in the State is going through a bearish period due to the sluggish demand in global markets. This has impacted exports and stocks are piling up. The levy of VAT decreased the textile sector's ability to compete with the neighbouring States where VAT was not applicable.

Fibre2fashion News Desk - India

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