Textile traders in Andhra Pradesh will observe a bandh on January 24 to mount pressure on the state government to withdraw 1 per cent VAT on textiles till a uniform tax regime is in place, AP Federation of Textile Associations said today.

The federation, which met here today, also said its members will not pay the tax till a uniform tax regime in form of VAT/GST comes into existence.

Ammanabolu Prakash, President of the federation along with Treasurer Badri Eashwarappa and Secretary Haji Ahmed said Andhra Pradesh was the only state at present that was levying VAT on textiles.

At least, five states that had imposed the tax had rolled it back in the interest of the traders. Even the manner in which the government was computing the VAT was complicated, putting small traders in confusion, they said.
The one-day bandh will cost textile traders in the state about Rs 10 crore as this was a low season for textile sales, the federation claimed. Textile sales touch Rs 50-60 crore a day during the peak season, Prakash said.

Presently none of the textile trader was either collecting VAT or paying it to the government. The government earns Rs 150-200 crore per annum by way of tax on the trade.

He said as a result of VAT, traders in Andhra Pradesh were worried about losing out to neighbouring states while suffering huge losses.

Reiterating that they were not against payment of VAT, the Federation sought for uniformity of tax and urged the state government to keep the same in abeyance till the Centre implements GST or VAT across the country.