Bandh call by Jamnagar brass hardware units

More than 500 units engaged in manufacturing brass hardware are on the verge of closure, following the 12.5 per cent value-added tax (VAT) imposed by the state government.

As a result, Jamnagar-based brass hardware manufacturing units observed a bandh and took out a rally to oppose the tax.

While speaking to Business Standard on the difference on the VAT imposed across the industry, Ramjibhai Patel, president, Jamnagar Brass Parts Association (JBPA), said, "Overall VAT imposed on brass parts and products made of brass is 4 per cent, while hardware parts, mainly used in the construction industry, are being treated and termed as luxury products, and invite a tax of 12.5 per cent."

Profit earned from sale of a metric tonne of brass hardware is hardly Rs 3,000 to Rs 4,000, whereas the tax is approximately Rs 25,000.

Discrepancy in the context of VAT imposed on similar product across the country is also a major concern for the trade.

"VAT imposed on similar products states such as Delhi, Kerala and Rajasthan is 4 per cent, whereas in Gujarat it is 12.5 per cent. This means that if the same product is sold or traded within or outside Gujarat, buyers have to pay 12.5 per cent towards VAT charges. So who would buy a product from Gujarat?" questions Amrut Shah, secretary, Jamnagar Brass Parts Association.