Concerned over the recent amendment by the state government to value added tax (VAT) that restricts tax benefit only to sales made within Tamil Nadu, industries in Coimbatore have demanded that the amendment be repealed.

It is said that pumpset industry in the region will be hit badly as a majority of the pumpsets manufactured here are sold in markets outside Tamil Nadu. "While manufacturers in unorganised sector will be spared, those in the organised pumpset sector will be affected due to the recent amendment," said a pumpset manufacturer in the organised sector.

According to him, this would create an imbalance between organised and unorganised sectors in pumpset manufacturing and ultimately result in organised sector losing its competitiveness. Stakeholders in the organised sector also said price of the pumpsets manufactured in Coimbatore region would increase further if the tax benefit is removed. "If pumpsets manufactured in Coimbatore are priced higher than those manufactured elsewhere, we have to forego our sales," a manufacturer said.

It may be noted that pumpset manufacturers have increased the cost of their products already due to increase in input costs.

Apart from this, other major industries like the textile and auto component manufacturers which dependent on the upcountry market for selling a majority of their goods are also apprehensive as they will not be able to avail the VAT benefit.

Industrial associations including Coimbatore District Small Industries' Association ( CODISSIA) have already appealed to the state government to repeal the amendment in the interest of industries based in Coimbatore.