Chief minister N Kiran Kumar Reddy turned down the demand of textile traders on withdrawal of five per cent Value Added Tax (VAT) levied on textiles in the state.

The textile traders across the state have been observing a textile trade bandh for the past five days demanding abolition of VAT.

A delegation of textile traders' association met the chief minister here this morning to put forth their demand.
The chief minister informed them that the government has levied VAT on textile traders having a turnover of over Rs 10 crore. He said the VAT has been imposed to raise money for implementing various welfare schemes and programmes launched by the state government for poor and downtrodden sections of the society.

Questioning the rationale behind seeking exemption of VAT by big traders, Kiran Reddy stated the government has not imposed VAT on the traders whose turnover is below Rs 5 lakh. The government has imposed one percent VAT on traders having turnover of Rs 40 lakh and levying VAT on the traders whose turnover is over Rs 10 crore, he added.

He said that government has imposed VAT on the lines of other states and urged the big textile owners not to resort to agitations seeking exemption from VAT. He, however, assured them they would not be subjected to any kind of harassment in the collection of tax.

Kiran Kumar Reddy told them that no tax is being levied on powerlooms, handlooms and zari material.
Unhappy with the response from the chief minister, the textile traders decided to continue the agitation and would soon meet to decide the future course of action, according to Twin Cities' VAT-JAC of APFTA convener, Ammanabolu Prakash.
He said the imposition of VAT on textiles has hit traders hard and most of them have moved to neighbouring states. He appealed to the government to keep the order in abeyance till the Goods and Service Tax is implemented across the country. There are one lakh traders across the state. The trade bandh would be continued till January 31.