The Hindu : Kerala News : Plea to exempt Khadi units from VAT

Online edition of India's National Newspaper
Wednesday, Feb 23, 2005

Kerala

Kerala

Plea to exempt Khadi units from VAT

By Our Staff Reporter

KOZHIKODE, FEB. 22. Office-bearers of the All India Khadi and Cottage Industries Congress have alleged that the State Government is in effect helping multinationals by exempting only 21 items manufactured by the Khadi and Village Industries from the purview of Value-Added Tax (VAT).

In a statement here today, the organisation's general secretary, C.P. Abdul Azeez, said the State Government must give exemption from VAT to all those items notified by the Central Khadi Commission. The Central Khadi Commission has notified as many as 115 items under the khadi and village industries sector to be exempted from tax.

Mr. Azeez said the inclusion of the products of village industries under the purview of VAT would have a grave impact on small-scale units.

He urged the State Government to modify its budget proposals for 2005-06 so that those items exempted from tax by the Central Khadi Commission were exempted from VAT in Kerala.

They said the decision of the State Government would result in the closure of Khadi units and throw out of employment scores of people in the rural sector.

As many as 4,000 units (with an annual turnover ranging from Rs.10 lakhs to Rs.1 crore) providing indirect employment to more than 30,000 people in villages are likely to be affected by the decision. The decision will result in the closure of the units, they said.

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