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.
Fibre2fashion News Desk - India
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