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Orissa textile traders resent VAT; plan protest
Feb '12
In response to the decision of the Orissa Cabinet to impose five percent value added tax (VAT) on textiles, the traders in the east Indian state are planning to agitate from next week.

The cabinet decision to levy VAT and to hike its base rate from four percent to five percent is expected to be included in the state budget 2012-13, the traders said.

The All Orissa Textile Merchant Association said it is planning to launch a state-wide agitation from March first week demanding rollback of VAT and withdrawal of entry tax, currently collected at two percent on textile products.

Traders say the cost of textile items in the state would go up by 20 percent due to the continuation of two percent entry tax and the imposition of five percent VAT.

As a result, consumers will prefer to buy from neighbouring states where these items would be relatively low-priced, as none of the adjoining states – Andhra Pradesh, Jharkhand and West Bengal – are levying entry tax on textile goods.

Last year too, the Orissa government announced imposition of VAT on textiles at four percent, but subsequently, the government bowed to intense pressure from protesting traders and withdrew the tax.

Fibre2fashion News Desk - India

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