The state government’s decision, in its Cabinet meeting recently, to impose 5 per cent VAT on the sale of cloth in the state has evoked a sharp criticism from cloth traders of Nurpur, Jassur, Jawali, Rehan, Indora, Nagrota Surian and Kotla.

The local cloth merchants’ association has appealed to Chief Minister Virbhadra Singh not to impose VAT on cloth and defer it notification as cloth buyers were already paying hefty indirect taxes and the imposition of the proposed VAT would further escalate the cost of cloth and put more burden on customers.

Association president Sukesh Kumar lamented that cloth traders were already reeling under a financial crisis as medium and high-class buyers were using readymade garments. He pleaded that none of the bordering states had imposed VAT on the cloth and traders of the state were fetching cloth from wholesale markets in neigbhouring states.

He said with the imposition of VAT by the state government, buyers from bordering areas of the state would sure to visit Punjab towns to purchase cloth, which would aggravate the financial crisis of local traders. Terming the proposed decision of the state government to impose 5 per cent VAT on cloth as anti-traders and anti-buyers, he urged the chief minister to defer this decision in the larger public interest.

Meanwhile, Sunil, Ashok, Sanjay, Devinder and Suraj of Nurpur, Tribhushan, Harsh of Kotla, Pradeep of Jawali and Dharampal of Jassur, all prominent cloth traders, lamented that the cloth business was already facing a slump and said the imposition of 5 per cent VAT on the sale of cloth would certainly discourage customers from purchasing cloth even in the marriage season from local markets and they would prefer neighbouring Punjab towns.

It is notable that the then Dhumal government in the state had also proposed 5 per cent VAT on cloth in June 2011, but after the state-wide criticism and outcry the government had revoked its decision. The cloth merchants’ associations in lower Kangra district are reportedly chalking out its strategy to launch a stir if the state government didn’t withdraw its proposed decision of imposing VAT on cloth.