The Assam Textile Merchants' Association has urged the state government to withdraw 5 percent VAT on textiles, which was imposed recently.
According to Assam Textile Merchants' Association, no other state in the NE region has imposed this tax. Representatives of the association said people are already reeling under inflation and this new tax will further shoot up the prices of clothes, making their lives miserable.
They added that textiles will become costlier in Assam and people near the border areas will prefer shopping in the nearby states. They said states like Uttarakhand, Madhya Pradesh, Rajasthan, Andhra Pradesh, Goa, Delhi and Nagaland had imposed the tax, but they revoked their decision after knowing the consequences.
It stated that in villages and interior areas, textile trade has taken the form of a cottage industry and the womenfolk and small households buy clothes in small quantities and stitch garments to sell them in the local haats or weekly bazaars. As a result of imposition of VAT, garments from neighbouring states will start pouring in, leading to the decline of the state's cottage industry.
The association said dealers from other northeastern states will stop buying textiles from Assam as the 5 per cent increase in prices will make purchasing unviable, forcing them to look for other states. The textile trade in Assam will collapse. This will be detrimental to the economy of the state.