Surat textile traders cheer as AP slashes VAT

24 Apr '12

2 min read

The Andhra Pradesh government's decision to slash the value-added tax (VAT) on textile goods from the existing 5 percent to 1 percent on any level of business turnover above Rs. 750,000, has brought cheer among Surat textile traders who supplied goods to the southern Indian state.

Fibre2fashion had earlier reported that transporters in Surat stopped taking bookings and traders from Andhra Pradesh started cancelling their orders soon after the announcement by AP textile traders that they would stop buying textile goods from other states beginning April 15, 2012.

The Andhra Pradesh Federation of Textile Associations (APFTA) had also announced that wholesale, semi-retail and retail traders in the state would go on an indefinite strike from April 30, 2012 to protest against the imposition of the five percent value-added tax (VAT) on textiles by the state government.

However, with the reduction of VAT to 1 percent, AP textile traders are planning to call off the proposed indefinite strike from April 30, 2012 and are most likely to resume buying textile products from Surat.

AP textile traders purchase many products, including fabrics, sarees and dress materials from Surat and hence the rollback of VAT rate is positive news for Surat's textile traders, the Federation of Surat Textile Traders Association (FOSTTA) said.

On an average, AP traders purchase about Rs. 70-80 million worth of goods on a daily basis from Surat. Even during an off-season, there is Rs. 50 million worth of business a day with AP.

Fibre2fashion News Desk - India

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