Chief Minister N Kiran Kumar Reddy, on Friday, rejected textile traders' demand for the withdrawal of the 5% Value Added Tax (VAT) imposed on textiles.
The Chief Minister said that the government has imposed the VAT only on textile traders having turnovers of over Rs. 10 crores, and that it was imposed in order to fund the welfare schemes and programs launched for the poor and downtrodden.
The Chief Minister made this statement when the group of textile traders, who have been observing a bandh from 23 to 31 January, called on him at his Camp Office on Friday, demanding exemption of VAT. They claimed that the VAT has been affecting their businesses adversely.
Questioning the rationale behind seeking exemption of VAT by big traders, the Chief Minister stated that the government has not imposed VAT on traders whose turnovers are below Rs. 5 lakh. The government has imposed 1% VAT on traders having turnovers of Rs. 40 lakh, he said.
Stating that the government had imposed VAT on the lines of other states, he said that big textile houses must not resort to agitations and dharnas seeking exemption from VAT. However, he assured that he would direct officials not to harass traders over the VAT.
Dissatisfied with the CM's response, the textile traders decided to continue the agitation. They said they would meet soon to decide the future course of action. (INN)