Search
Info Center
Home > Info Center > CCSE Review
Return
ReturnIndia centre to bring textile products under VAT
Author：
admin
PublishDate：
2005-08-03 14:30:00
Hit：
505
The Gujarat textile industry may suffer heavy losses if the state fails to shift to Value Added Tax (VAT) regime before April 2006. The Central government has decided to bring textile products under VAT from April 2006.
The textiles, sugar and petroleum products were exempted from VAT chain when the new tax regime came into force from April 1, 2005. The Central government has announced that textile products would be brought under VAT from the next financial year,?said Arun Jariwala, chairman, The Surat Art Silk Cloth Manufacturers Association.
This would be a very tricky situation for the textile industry. If Gujarat does not implement the VAT from April 2006, the traders of other states would not get set-off against the tax paid by them on the textiles purchased from Gujarat On account of this, for the traders of other states, costing of textiles purchased from Gujarat would be higher than that of textiles purchased from the VAT states,?he said.
The traders of other states would not find buying textiles from Gujarat beneficial, and would turn to other states. This would naturally lead to a decline in demand for textiles from Gujarat. The industry would have to suffer heavy losses because of this. To avoid such a situation, it is extremely important that the state government shifts to VAT regime from the next financial year,?Jariwala added.A leading textile businessman asked the state government to shift to VAT at the earliest.
Along with the diamond industry, the textile industry is the backbone of the state's economy. Any impact on the textile industry will adversely affect the government exchequer. The state government should keep this in mind, and instead of waiting for the other states, should shift to VAT regime at the earliest,?a leading businessman said, requesting anonymity.He accused the government of indulging in politics at the cost of the industry.
The state government has kept away from VAT only for political reasons. There is no other reason for refusing to adopt VAT. The state government has committed a grave mistake, which is evident from the fact that its revenue has fallen, while that of states which opted for VAT, has gone up. The state government would be best advised to keep the politics aside, and work for the betterment of the industry,he added.
