Jewellers’ Assocation of Bangalore on Saturday urged Karnataka Government to withdraw hike in VAT on jewellery from one per cent to two per cent proposed in the 2011—12 budget.
The Association in its memorandum submitted to the government said the hike would lead to trade diversion to other neighbouring states like Tamil Nadu, Maharashtra and Andhra Pradesh where jewellery continue to attract one per cent VAT.
The Government hopes to earn Rs 200 crore revenue from VAT hike on jewellery and Gems.