Shimla : The Himachal Pradesh government is considering raising of value added tax(VAT)on textiles,iron and steel, making these items expensive soon,sources said.
The state excise and taxation department could impose VAT on textile fabrics and further raise VAT on iron and steel products sometime this month.
The department has sent a proposal for imposing 5 per cent VAT on textile fabrics.If implemented this could bring in a lot of revenue to the state government.In the resort town of Shimla apparel and clothing stores outnumber all other stores.
The current VAT on iron and steel products is 4 per cent.The proposal is to raise this to 5 per cent making construction work more expensive in the hill state.
In a 20 year career published widely. He has worked for the BBC, AFP, The Statesman, IANS and the Business Standard . Known for his hard hitting writing and occasional off-beat stories. He lives in Shimla.
Himachal is the “end of the road state” and is currently poised for expanding and improving infrastructure. All infrastructural aspects need iron and steel as a critical input and raising the tax rates on this input would only lead to higher costs. It will also have a cascading effect on prices of the related final goods and services. There is a need to rethink on this particular issue.