The Government of Gujarat will impose tax at the rate of five per cent including additional tax on technical textiles, finance minister Saurabh Patel announced in Budget 2015-16.

 

The proposal to impose tax on technical textiles will bring additional tax revenue of approximately Rs 80 crore, Patel said in his Budget speech in the state assembly.

 

Technical textiles is used in industries like building construction, civil engineering, furniture, household textiles, floor coverings, automobiles, shipping, railways, and packaging.

 

Explaining the rationale behind brining technical textiles under tax net, Patel said, “The raw materials normally used in the manufacture of technical textiles are artificial materials like plastic, nylon, resins, rubber, metal, etc. Moreover, there is significant value addition in this product. It is necessary to bring this industry in the tax net.”

 

However, all other types of fabrics including fabrics used for garments and domestic purpose will continue to be fully exempt from tax in the state.

 

In order to encourage usage of khadi and to avoid the tax burden on purchase of cotton roving, Patel proposed to give refund of the tax paid on current rate of five per cent including additional tax on the cotton roving purchased for manufacture of khadi cloth, garments and made ups by the Khadi Gramodyog Board approved institutes.

 

While khadi cloth, garments and made ups are full exempt from tax, the Gujarat government levies tax on cotton roving used in manufacture of khadi cloth. The tax refund will ease burden on khadi cloth, garments and made ups.

 

Tax refund on cotton roving will reduce the state’s tax revenue by approximately Rs 1 crore, according to the finance minister. (RKS)