A hurriedly called meeting of members of Surat Colour Chemical Merchants Association (SCCMA) at Bombay Market on Wednesday evening decided to make a presentation to the state government on amendment in VAT rates.

The government presented VAT Amendment Bill in Assembly on Tuesday making important changes. It has placed chemicals not in the industrial input list in others' category. This category will attract VAT at 15 per cent. Chemicals that continue to figure in the input list will attract 5 per cent VAT.

The proposed amendment has worried local textile and chemical producers. In these times of recession, they fear the additional tax burden could ring the death knell for many. Chemical merchants want chemicals used in textile industries to be added to the list of industrial inputs so that they can pay 5 per cent VAT.

"We met the VAT committee members of Southern Gujarat Chamber of Commerce and Industry (SGCCI) too. We have to make a presentation to the government. Otherwise, many of us will suffer heavy financial losses," said a SCCMA member. He added that they will decide future course of action after meeting other organizations.

Former president of Southern Gujarat Commercial Tax Bar Association Prashant Shah said, "Chemicals that don't figure in 42(A) of industrial inputs list will attract the higher rate. Many chemicals used by local industry will fall in this category."

However, textiles and chemicals merchant Rakesh Chaudhary feels, "Looks like the government has made this amendment keeping in view chapter 39 of Excise Act. As per this provision, most chemicals come in list of industrial inputs. So, textile and chemical producers shouldn't feel much of a burden."