Withdraw VAT on textile items, demand traders

Textile merchants of the State are up in arms against the Government for its dilly-dallying tactics on withdrawal of value added tax (VAT) on ‘lungi’, ‘gamucha’ (towel) and madeup sarees.

They have warned of launching a statewide shutter-down agitation if the Government does not come out with the withdrawal notification soon. The Chief Secretary had recently announced that VAT has been withdrawn on ‘lungi’ and gamucha’ products but no notification has been published and the officials concerned continue to collect the tax, they alleged.

A State-level textile merchants’ meeting organised by the Federation of All Orissa Traders Associations (FAOTA) here on Friday decried the imposition of four percent tax on the above items even though textile products are exempt from VAT all over the country. Textiles are kept out of VAT because the Centre has levied an additional excise duty on it.

Further there is two percent entry tax on sarees being brought into Orissa, the merchants stated. General Secretary of FAOTA B K Mohanty said the items brought under the purview of VAT are mostly used by the poorer sections of the society.

While the tax would make ‘lungis’, ‘gamuchas’ and sarees costlier, hitting the general public hard, it would also result in reduced sales turnover and affect the handloom and powerloom sector in the State. Despite a High Court direction to the Government to take decision on the front under the VAT Act with due consultation with traders, no action has been taken.

Meanwhile, State Higher Education Minister Samir Dey has promised the traders that he would pursue the issue at the Cabinet level.