VAT imposition irks diamond and zari industries in Surat

Surat, Mar 2 (UNI) Gujarat government's decision to impose VAT has led the industrial circle in Surat to an intense lobbying, with the industrialists planning to meet State Finance Minister this week to request him to rethink on the issue.

Yesterday, the diamond association had said the entire diamond industry will be shut down if the Government does not rethink on imposing value added tax (VAT) in the State.

Diamond and zari are two major industries in Surat that will have to pay VAT as per the new tax regime established in the State.

While zari manufacturers have to pay four per cent, the diamond industry has to pay one per cent tax under the VAT system.

Earlier, the diamond industry was not covered by any taxation other than income tax, as the industry was supposed to handle only raw diamonds which are mainly exported.

''98 per cent of the diamonds from our industry are being exported and the Government is getting a huge revenue as foreign exchange and income tax. We feel that bringing diamond industry under VAT will only affect a flourishing industry,'' Gems Export Promotion Council convenor Chandrakanth Singhvi said.

Meanwhile, former Textile Minister Kashiram Rana has also issued a statement urging State government to rethink on the VAT regime.

However, sources said the industry is not adopting a stubborn position now.

Southern Gujarat Chamber of Commerce vice president Pravin Nanavati has also said as a first step, they will meet the State government officials to seek their reconsideration on the issue.

UNI MS GK AG1633