Textile traders in Andhra Pradesh are heaving a sigh of relief as the State government has toned down its July 11 order imposing four percent value added tax (VAT) on textiles.
The decision of the government has come in the wake of protests by over 100,000 textile traders, who had twice observed bandh since the implementation of VAT.
As per the notice issued by Commissioner for Commercial Taxes Department, Mr. Suresh Chandra, small textile traders whose yearly taxable turnover is less than Rs 500,000 will be exempted from the tax.
Merchants with a yearly taxable turnover between Rs 500,000 and Rs 4 million would have to pay tax at the rate of one percent. However, VAT would not be applicable on inter-State sales of textiles.
All handloom items will also exempted from VAT and these include textiles, zari and embroidery articles, and made-ups that are woven by hand. Similarly, all khadi items, including fabrics, garments and made-ups will be completely exempted from the tax.
To claim exemption on inter-State sales of textiles, traders will be required to produce C-Form, the notice said.
Fibre2fashion News Desk - India
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