Posts Tagged ‘Vat in Orissa’

Orissa Textile Traders on Stir against the Imposition of VAT

Textile traders across Orissa have downed shutters on seeking immediate withdrawal of VAT on textiles.The traders said Orissa is the first state to have imposed four per cent VAT on textile fabrics and sugar from May 3. Rajasthan and Jharkhand, which had imposed VAT on textile products but withdrew after the merchants protested.

The All Orissa Textile Merchants’ Association general secretary Mohanlal Jain said VAT had increased the cost of Orissa textiles compared to those in Chhattisgarh, Jharkhand, West Bengal and Andhra Pradesh. This is disadvantageous for wholesalers because many retailers would now buy from the neighboring states, Jain said.

The price of clothes in the state is up by six per cent as the state government is collecting entry tax of two per cent besides VAT, he said. The traders will keep their shops shut on Wednesday when they will take out a rally, he added.

The total worth of Orissa’s textile industry stands at Rs 20,000 crore. There are seven lakh textile merchants in the state, Jain said.

He said the traders had met chief minister Naveen Patnaik on May 19 and gave him a memorandum requesting withdrawal of the tax. The government had requested the traders not to go ahead with the agitation, which was initially planned for May 24 and 25. The traders again met chief secretary B K Patnaik on June 4, but to no avail. They were then forced to go on agitation, he said.

In Cuttack, around 3,000 traders closed their shops and staged protest by taking out a rally from Jubilee Tower near Cuttack Municipal Corporation office to Banijyakar Bhawan. Describing the state government’s decision as arbitrary’, they demanded an immediate rollback.

The Union Budget 2011 allowed states to impose tax on sugar and textiles, which were earlier exempted from VAT and were covered under the Additional Duties of Excise (goods of special importance) Act 1957. Over 550 items are covered under VAT.