HYDERABAD: Textile traders in the city observed a bandh on Wednesday, protesting against the 4 per cent VAT to be levied on textiles. Traders staged a dharna in Secunderabad wearing black badges and holding placards against the imposition of VAT.Speaking to mediamen, N Sangameshwar, president, Secunderabad Cloth Merchants Association said the state government’s move would hit wholesale traders hard. “Looking at the mushrooming of malls in the city, the government has a misguided perception that textiles is a huge business. Malls are a fraction of the sector and the profit margin is low. The VAT would only spell doom for us,” he said. There are 5 lakh hawkers selling clothes and more than a lakh housewives in the business who are going to be affected, Sangameswar added. “It is as if we are forced to marry two people,” quipped association member A Bhai Dawuda adding, “We have to shell out money on the tax and also pay bribe to officials.” The government is squeezing every penny out of us. We are now compelled to show our stock books every month to government officials. Traders have to hire at least two more people exclusively for maintaining these records, added Sunil Wadhwa, owner of Ambika Silks in Secunderabad. The core problem is the 4 per cent VAT on textiles is being implemented only in Andhra Pradesh. People will now approach our competitors in neighbouring Karnataka and Maharashtra for business as they will find the same cloth at a lower price. Ultimately, the state will be the loser, said Ramesh Chintala who owns SV Silks.While cloth merchants will be directly hit by the VAT, the readymade cloth dealers are also worried about bearing the indirect burden of the tax. When we buy readymade clothes from dealers, we have to bear the initial tax levied on the cloth merchant and also the tax levied on the garment manufacturer, said Jitesh Lalwani, one of the owners of Red Sun garment store.Shopping malls with huge business are also likely to be hit. Either the tax has to be bourne by the shopkeeper or the burden passed onto the customer. Since shopkeepers have no choice but to pass it on to the customer, sales will come down. Whether it is a small shop or a mall, we all lose customers, GV Seshacharyulu, manager, CMR Exclusive, Secunderabad said. Another readymade clothes’ shopkeeper, however, said the new tax will not have an effect on small shops such as his, who source their clothes from other states. Adding to the woes, many traders lack awareness about VAT. The government should at least spread awareness about the new system instead of harassing traders, opined one member of the Cloth Merchants Association.
Comments
0 comment