Home / Knowledge / News / Textiles / Govt should remove VAT on handloom & handicrafts, ASSOCHAM
Govt should remove VAT on handloom & handicrafts, ASSOCHAM
Oct '09
Mr. D S Rawat, Secretary General, ASSOCHAM
Mr. D S Rawat, Secretary General, ASSOCHAM
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has urged the Finance Ministry and the Empowered Committee on VAT to remove the Value Added Tax (VAT) on products of fashion, especially with more than 50% handloom and handicrafts input to make them competitive in the global market.

In a representation sent to Finance Ministry and Empowered Committee on VAT by ASSOCHAM Secretary General, Mr. D S Rawat, it is stated that Indian fashion industry is at budding stage and accounts for barely 0.3% of international industry's networth, which may further come down in the absence of necessary government support.

Currently, fashion products that fall under VAT net ranging between 8-12% and make them costlier and thus dilute their competitiveness, the ASSOCHAM has thus emphasized need for removal of VAT on fashion products, having more than 50% handloom and handicraft input.

The Chamber has argued that the fashion design industry in India is extremely fragmented and unorganized even then it is expected to touch over Rs.800 crore of turnover in next 2-3 years. The present estimated level of fashion design industry is around Rs.300 crores.

Mr. Rawat said that the current market scenario and market dynamics of the designer wear industry in India finds it difficult to build concept and implementation of roadmap for setting up a successful, self-sustaining fashion hubs in India and therefore, the government support to it is the need of hour especially in the form of tax incentives and also need funding assistance.

The ASSOCHAM has also come out with a roadmap for creation of fashion hub which can be possible by implementation of roadmap to be jointly prepared by industry and government with strategic approach for short, medium and long-term.

The ASSOCHAM has recommended that the suggested fashion hubs could be set up provided India looks at successful models of setting up and running fashion hubs in different countries such as USA, France, South Africa, also in emerging markets like Dubai.

Relevant elements could be taken to develop the fashion hub in areas with maximum participation from the government since there are many examples where the government is promoting fashion industry such as France, Japan, Hongkong, USA etc.

In view of ASSOCHAM, the suggested fashion hubs should be set up as an special purpose vehicle (SPV) model under Companies Act.The land should be identified and purchased by the SPV before government puts it in its contribution as equity or grant.

The government equity and grant could be limited to 20% of project costs including facilities like health, spa, hotel and guest fitness centres, subject to a maximum of Rs.20 crore.

Government equity should be released in 4 equal instalments subject to equal contribution having been made by SPV after purchase of land, said Mr. Rawat.

The Associated Chambers of Commerce and Industry of India

Must ReadView All

Union textiles minister Smriti Irani addressing at the Texprocil Annual Export Awards. Courtesy: PIB

Textiles | On 22nd Oct 2016

Govt to extend special package to home textiles segment

The Central government is likely to extend the recently approved Rs...

Reebok Liquid Speed Grey. Courtesy: Business Wire

Apparel/Garments | On 22nd Oct 2016

Reebok’s Liquid Factory brings sneaker creation to US

Reebok, a pioneer in the sporting goods industry, has brought sneaker ...

Courtesy: GHCL

Textiles | On 22nd Oct 2016

GHCL to invest Rs 67.25 crore in textile division

Chemicals and textiles firm GHCL will invest Rs 67.25 crore in its...

Interviews View All

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Evelyne Cholet

‘France had a reputation of being big in new ideas, but poor in marketing...

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

October 2016

October 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Advanced Search