Gujarat exempts handicraft, khadi from VAT; relax it for other items

Ahmedabad, Apr 28 (UNI) In a major policy decision, the Gujarat government today withdrew Value Added Tax (VAT) from all handicraft, khadi and 16 other items, reducing it from 12.5 per cent to 4.0 per cent for industrial inputs and made it 4.0 per cent for all rented goods across the board.

Making the announcement, Minister of State for Finance Saurabh Patel justified the exemption and relaxations to keep the VAT rates competitive vis-a-vis other states.

He said the decision has been taken by Chief Minister Narendra Modi, after taking into consideration representations by various chambers and traders' assocations.

Mr Patel said that VAT has been totally withdrawn from all items produced by organisations recognised by Khadi Gramodyog as well as Khadi and Village Industries Commission.

Sixteen items totally exempted include bangles, 'mangal sutras' (except bullion), hairpins, flat and puffed rice, jaggery, animal cart parts, bones and bone powder, synthetic gems (Cambay), seeds (except imported), scales (except electronic), handkerchief, handmade paper, raw wool and saree 'falls'.

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