The steep increase in tax on private motor vehicles from Rs 150/seat per quarter to Rs 500 a seat per quarter has come as a huge blow for the Tirupur knitwear cluster.
Exporters have voiced concern over this 300 per cent increase in the tax rate, which came into force from April 1.
Mr A. Sakthivel, President, Tirupur Exporters’ Association (TEA), told Business Line that the exporting units operated such pick-up transport to enable the people in the surrounding villages reach the work spot without much of a hassle.
“Bus connectivity is a problem for those residing in rural pockets. The individual exporting units therefore took it upon themselves to ply such buses, so the rural workforce, particularly women, did not have to walk long distances to eke out their living.’’
Total number of buses engaged by the individual units for the purpose is estimated at around 600.
According to Mr Sakthivel, around 30 per cent of women used the conveyance facility and the average cost, estimated at Rs 20 per employee.
“The present hike in tax rate will more than double our conveyance cost. The sector will not be able to afford this increase at this juncture, as buyers are already negotiating rates because of the depreciating rupee. The pressure is mounting,’’ he said.
The association has appealed to the State Chief Minister, Ms J. Jayalalithaa, to exempt the knitwear exporting units from the increase in tax on private buses, particularly, those used for ferrying workers from the surrounding villages to the work spot.
The employment opportunity has helped in economic upliftment of the rural poor. This increase in tax rate would only bring about a setback, as the exporting units are hesitant to operate the buses and this in turn would affect the livelihood of the people, Mr Sakthivel said.
Hence, he appealed that the exporting units be allowed to pay the tax at the rates that prevailed before revision.