STATES ARE PLANNING TO IMPOSE VAT ON SUGAR AND TEXTILE

GST (Goods & Service tax) starts taking its shape as the two VAT and sales tax exempted and the necessary items for general public will be come into the reach of VAT, Sugar and Textile. States are planning to impose VAT on sugar and textiles from the next financial year which is 01-04-2012.



Earlier, Sugar and textile come in the taxation of excise where AED (Additional excise duty) was charged on these products. Centre used to give 1% additional devolution to the states from the AED charged on these products. AED on these products stopped in financial year 2006-07, but the 1% additional devolution to the states continued till 2010-11.


Sugar and textile are the products which everybody need. Putting the VAT on these products will only increase these rates and increase inflation.