Delhi government rolls back proposed VAT on footwear, fabric

The Delhi government on Wednesday rolled back the proposed Value Added Tax (VAT) hike on textiles and footwear costing below Rs.500.

“We are not kings that it would hurt our ego to take our words back. We realized that the decision (on proposed hike in VAT) was not good for footwear and textile traders. So we decided to roll back the hike,” Delhi Finance Minister Manish Sisodia said in the assembly, following protests by several Aam Aadmi Party MLAs and a BJP leader.

At present, footwear costing above Rs.500 and schoolbags costing above Rs.300 are taxable at 5 percent. A uniform tax was proposed on footwear below Rs.500 also, which were earlier exempted.

Under the proposals for 2016-17 Delhi budget, a uniform tax of five percent was proposed on textiles and fabrics, including sarees, but exempted khadi and handlooms.

AAP MLAs Madan Lal, Alka Lamba, Vishesh Ravi, Anil Bajpai, Jarnail Singh and leader of opposition Vijender Gupta on Wednesday expressed concern over the government’s proposal and urged it to take it back.

Delhi Chief Minister Arvind Kejriwal appreciated his government’s move and took a jibe at the Centre.

“We are proud of our U-turn, because it is in favour of the people. While there is an arrogant central government, which despite protests by jewellers for the last 29 days, is not rolling back its proposal to impose additional excise duty on them, our government changed its decision within 36 hours for the sake of people,” said Kejriwal.

He praised his government as the “fastest” in the country, working with the “speed of light”.