VAT worries cloud jari industry

The crisis ridden jari industry of Surat is worried over the speculations that it might be covered under Value Added Tax (VAT).

"VAT will be implemented all over the country from April 1. The state government had issued a white paper on VAT last week, containing the list of 56 items that would be exempted from VAT. Surprisingly, traditional jari is classified as a handicraft, and is even exempted from sales tax, but it did not figure in the list. This omission might lead the state government levying VAT on jari," Raman Jariwala, a leading jari businessman of Surat, told Business Standard.

"If the state government does bring jari under VAT, it would attract 12.5 per cent tax, which would adversely affect the industry. Already the industry is reeling under recession and the additional tax, would mean death-knell for the industry," he said.

At the same time, Jariwala expressed hope that jari would be exempted from VAT. "The state government has said that those items, which attract zero per cent tax at present, would be exempted from VAT. We believe jari was missing from the list of VAT-exempted items, due to some mistake, and we are hopeful that it would be exempted from VAT, as and when it is implemented," Jariwala said.

The jari industry has made a representation to State Finance Minister Vaju Vala, on Wednesday, and urged him to exempt jari from VAT. Some leading jari businessmen of Surat are also scheduled to meet the finance minister in Gandhinagar on February 8, to press for their demand.

Member of Parliament from Surat, and former Union textiles minister Kashiram Rana, has also urged the state government to exempt jari from VAT.

"The jari industry is not in a position to bear the tax burden VAT would bring on it. For the survival of the industry, and in interest of thousands of workers, jari should be exempted from VAT," Rana stated, in a letter to Vaju Vala, who has assured to sympathetically consider the demand.

As mentioned earlier, the jari industry, which is in existence in Surat since 150 years, is passing through an extremely tough phase.

"The prices of raw material, such as copper and silver, have increased a great deal in the recent times. There is absolutely no demand for traditional jari, and though the industry has been observing a production cut since long, it is not helping at all.

"On the contrary, the situation is worsening for the industry, mainly on account of cheaper alternatives," said Shantilal Jariwala, former president of the Surat Jari Manufacturers Association.