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Foodgrains, textiles to cost more as Govt hikes VAT rate

posted Sep 14, 2011, 12:30 AM by Puneet Goyal   [ updated Oct 4, 2011, 10:44 PM ]
Prices of food grains, textiles, garments and all industrial inputs are set to go up in Andhra Pradesh, with the Government increasing the primary VAT (Value Added Tax) slab of 4 per cent to five per cent.Notwithstanding protests by trade and industry sectors, the Government has issued an Order on Tuesday evening increasing the slab rate.The Government Order is seen as preparing the ground for the country-side Goods and Service Tax (GST) that is expected to come next financial year.“This is retrograde tax. The Government should remove food grains from the purview of taxes as it results in further increase of food inflation,” Mr Nitin K Parekh, Chairman of Tax and Commerce Committee of Federation of Andhra Pradesh Chamber of Commerce and Industry (FAPCCI), told Business Line.Textile and garments, which have been brought under the VAT net only recently, would have to pay one percentage point of additional tax.
Mr Balaji, who runs a grocery in Gandhi Nagar area, said the tax increase would result in increased prices of essential commodities. “Sales volumes of these commodities have seen a dip last month as consumers are cutting down spending,”