Andhra textile stir over VAT hits Surat synthetics
April, 16th 2012
The growing stir by textile traders in Andhra Pradesh on the state value-added tax (VAT) has already affected the synthetic textile industry in Surat, Gujarat.
As against a normal daily dispatch of textile fabric and apparel worth Rs 25 crore from Surat to Andhra , the business has slowed by 80 per cent in a week.
The stir is a protest at the imposition from July last year of five per cent value added tax (VAT) by the Andhra government, the only state to do so. Andhras textile traders are set for an indefinite strike from April 30 and to stop purchasing from other states from April 15. The VAT issue in Andhra Pradesh has been on since long but with the traders now deciding to go on strike, dispatches are already being cancelled. Traders and buyers from AP have begun cancelling or stalling the dispatches, leading to a loss of Rs 20 crore for the textile industry here, said Yuvraj Desale, president of the Surat Textile Goods Transport Association.
On any normal day, about 500 trucks ply daily from Surat, hub of the synthetic textile industry, to other states, with Rs 50 lakh worth of textile goods per truck. Of these, about 50 trucks go to AP every day, a daily business of Rs 25 crore for Surat.
This has now come down by 80 per cent, Desale added. While during the on-season the synthetic textile industry does 800-1,000 trucks per day, during the off-season it is 300-400 trucks daily.
Devkishan Manghani, general secretary of the Federation of Surat Textile Traders Association, says this is the second such setback in the past eight to 10 months. During September last year, the Telangana agitations had resulted in roadblocks, thereby hitting readymade apparel supply from Surat to Andhra.
The indefinite strike by APs textile traders have come at a time when the Surat industry is readying itself for the summer season. The orders had begun to look good. Since after Uttar Pradesh and other northern states, AP forms a major market, the Surat industry has taken a severe hit, said Desale.