| They have said they would otherwise be forced to shift to neighbouring Haryana, where there is no VAT on blankets. |
| Complaining that though it had been clearly communicated to the state advisory committee on VAT that the state's blanket industry should be saved by exemption, the committee had recommended exemption only of shoddy blankets. |
| The irate manufacturers have already issued an ultimatum to the government, which has now entered election mode, to act on the issue. Industry sources said almost 20 manufacturers had left the state since the imposition of VAT. |
| "As the price of polar blankets is just Rs 50 and our customers are mostly from the lower end of the market, the imposition of VAT and the resulting rise in prices of our product has led to most of the business shifting to Haryana, Himachal Pradesh and Rajasthan as the businessmen there can still afford to deliver goods at a cheaper price due to the absence of any such tax," said Shakti Jaggi, president, Ludhiana Textile Association. |
| The association members said the industry was brought under the VAT regime in August, 2005. After numerous representations by the manufacturers to the government, Chief Minister Amarinder Singh announced exemption of shawls and blankets from VAT as the tax was not being imposed in the neighboring state of Haryana. |
| However, in the end only shoddy blankets was exempted from VAT. |
| Jaggi added that the manufacturing of shawl was a manual process and the production involved almost 100 labourers in each unit. Since a large number of people earn their livelihood from these units, in case these units shift to other states, it would add to the state's unemployment. |
| The imposition of VAT has resulted in a price hike of blankets by almost 10 per cent, which has badly hit the market of these blankets. |
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