Over one lakh textile traders in Andhra Pradesh will observe a bandh on January 24 to press the State Government to withdraw the one per cent VAT on textiles till a uniform tax regime is in place in the country.
The AP Federation of Textile Associations, which met here today, also said its members will not pay VAT till the uniform tax regime in the form of GST is in place.
Ammanabolu Prakash, President of the federation, said Andhra Pradesh was the only State at present that was having VAT on textile.
At least five States that had imposed the tax, had quickly withdrawn it in the interest of the traders, he said.
Even the manner in which the Government was computing VAT was complicated, putting small traders in confusion.
The one-day bandh will cost textile traders in the State about Rs 10 crore, as this was a low season for textile sales. Textile sales touch Rs 50-60 crore a day during the peak season.
Prakash said the federation had earlier submitted an alternative proposal in March last year.
However, the State Government issued orders in November last, levying one per cent VAT on textiles.
However, textile traders will have to cough out three per cent VAT, since the tax is levied at different stages of manufacturing, wholesale and retail. He feared that the textile traders may shift to neighbouring states if the VAT is now withdrawn.