After State Government extended Value Added Tax (VAT) exemption on fabrics for one more year on February 9, South Gujarat Textile Processors Association (SGTPA) put forward their demand for similar exemption to State Government.
Textile processing is basically a small scale industry which runs on job-work basis.
A customer sends grey fabric for dyeing to processing units the grey fabric is returned on completion of the job. No sale has taken place hence VAT should not be applied, the representation states.
Processing of textiles will not be assessed for VAT if textiles are covered under additional excise duty, Empowered Committee of State Finance Ministers recommended.
State Government has levied VAT on synthetic textile processors, but has exempted processors of cotton fabric, thereby discriminating between cotton and synthetic textile processors, the association alleged.