The State government, which promised to take a positive decision on lifting Value Added Tax (VAT) on textiles, has changed its intention. The government, on the contrary, proposes to make licensing compulsory for all textile traders across the State.

The cloth merchants observed 20-day hunger strike in March demanding removal of VAT on textiles. Transport Minister Botcha Satyanarayana, along with two other Ministers, who met the agitating traders assured them of taking a decision after discussing with Chief Minister N. Kiran Kumar Reddy and made the traders call off the agitation.

The Pradesh Congress president, who addressed the cloth merchants at Vastralatha Hall on Sunday, said that the ball was in the court of cloth merchants and the traders should decide on who should be taxed and who exempted.

“It is not correct to lift tax for all traders, as some shopping malls and showrooms are doing business in some crores.

We are seriously thinking about the issue.

The government is also considering introducing slab system on collecting VAT. I advise the traders to hold discussions once again on the issue and, based on the outcome, the government will take a decision by the end of this month,” said Mr. Satyanarayana.

“Doing business in crores of rupees without licence is nothing but evading tax. The government is yours and the traders should think whether unlicensed business is justified,” the Minister said and tried to convince the traders.

However, the traders allege that the government failed to keep its word.

The proposal to relaunch licensing system was another burden for small traders and would severely affect the inter-State business.

“The slab system, proposed by the government, on VAT will create differences among traders. This is nothing but a ploy to disrupt unity among cloth merchants,” said a trader.

Secondary Education Minister K. Parthasarathy, Vijayawada MP Lagadapati Rajagopal, MLAs V. Srinivas and Malladi Vishnu, Vastralatha president Chintalapati Raghuram, Krishnaveni Wholesale Cloth Market president Bochu Venkata Narasimha Rao and others accompanied Mr. Satyanarayana.