Textile traders may restart their agitation against the government as the latter has reportedly not worked towards fulfilling its promise to abolish Value Added Tax. Traders allege that commercial tax officials are seizing their goods and serving notices demanding tax payment as per VAT stipulations when a government order scrapping 5% tax is due.
The state government had in July 2011 imposed VAT on textiles sparking intense protests from the traders. The government did not buckle despite a state-wide eight-day trade holiday declared by the traders in January this year. The commercial taxes department continued detaining bales and urging traders to register for Tax Identification Numbers ( TIN).
However this April the traders were able to negotiate an alternative tax mode with the government. The government agreed to 1% tax on turnover and promised traders speedy issue of an ordinance to the effect. But four months after, traders are unsure if the government will keep its word. "The chief minister had assured us that an order would be released soon but there has been no progress. The commercial tax officers are detaining bales and demanding a penalty of 5% in addition to tax component, from July 2011. About 5,000 bales have been detained since by-polls concluded in June," said office bearer Prakash Ammanabolu of Andhra Pradesh Federation of Textile Associations. It has been learnt that one of the ministers opposed the trader's proposal denying the ordinance governor's approval. The proposal is now pending with the cabinet.
When contacted, commissioner, commercial taxes, Suresh Chanda said that his department was awaiting instructions from the government. "We are waiting for instructions but until they come we are bound by the law. However seizes are being made not just for non-payment of tax but also for not registering with the department, which is mandatory," he said.