Gurgaon association seeks removal of VAT after lukewarm festival sale
Updated: Nov 09, 2013 05:15:49pm
Gurgaon, Nov 8 (KNN) Gurgaon garment and sari traders have called on the state government to remove the 5 per cent Value Added Tax (VAT) levied on the garment and textile products, especially after the lukewarm sale during the festive season.
About three months back the Haryana Government had imposed 12.5 per cent VAT on textiles. However, it had reduced the VAT on textiles, including woollen and home textiles, from 12.5 per cent to 5 per cent, saying it would benefit textile traders to the tune of Rs 1.5 billion.
But, as neighbouring Delhi does not have any VAT on saris, shoppers from Gurgaon and Faridabad moved to the national capital for better prices.
“The 5 per cent VAT has impacted domestic manufacturers largely,” said President of the Udyog Vihar Industries Association, Animesh Saxena.
“As the increase in VAT added on to the cost of the manufacturing, the textile traders in Haryana, especially in Gurgaon have experienced slow down during peak business time,” Saxena added.
The Association is now writing to the Haryana Government demanding removal of VAT.
The Gurgaon traders said that their festive season sale went down by at least 20 – 25 per cent lower this year. Not only did the localities go to Delhi to shop, but also many people who normally came to Gurgaon to shop from Delhi, did not turn up.
“The textile trade in Gurgaon and Faridabad alone is worth Rs 400 crore, and this will slow down if the VAT is not removed,” Saxena added.
“The textile industry is currently under recession. As it is a labour intensive sector, there might be job cuts as well,” he added.
He said that factories, especially the small enterprises are the main sufferers. The retailers too are likely to suffer because customers would prefer going to Delhi than shopping here because of the tax,” Saxena said.
The VAT on sari has not only hit sari traders directly, but also some indirect traders such as those involved in tailoring, pico work, inserting falls, polish etc who are mainly daily wage earners. (KNN/SD)
About three months back the Haryana Government had imposed 12.5 per cent VAT on textiles. However, it had reduced the VAT on textiles, including woollen and home textiles, from 12.5 per cent to 5 per cent, saying it would benefit textile traders to the tune of Rs 1.5 billion.
But, as neighbouring Delhi does not have any VAT on saris, shoppers from Gurgaon and Faridabad moved to the national capital for better prices.
“The 5 per cent VAT has impacted domestic manufacturers largely,” said President of the Udyog Vihar Industries Association, Animesh Saxena.
“As the increase in VAT added on to the cost of the manufacturing, the textile traders in Haryana, especially in Gurgaon have experienced slow down during peak business time,” Saxena added.
The Association is now writing to the Haryana Government demanding removal of VAT.
The Gurgaon traders said that their festive season sale went down by at least 20 – 25 per cent lower this year. Not only did the localities go to Delhi to shop, but also many people who normally came to Gurgaon to shop from Delhi, did not turn up.
“The textile trade in Gurgaon and Faridabad alone is worth Rs 400 crore, and this will slow down if the VAT is not removed,” Saxena added.
“The textile industry is currently under recession. As it is a labour intensive sector, there might be job cuts as well,” he added.
He said that factories, especially the small enterprises are the main sufferers. The retailers too are likely to suffer because customers would prefer going to Delhi than shopping here because of the tax,” Saxena said.
The VAT on sari has not only hit sari traders directly, but also some indirect traders such as those involved in tailoring, pico work, inserting falls, polish etc who are mainly daily wage earners. (KNN/SD)
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