The Andhra Pradesh Government has brought sugar, textiles and fabrics under Schedule IV of the VAT (value added tax). They are going to be taxed at a rate of 4 per cent. In a GO (No. 932) issued on Friday evening, the Government however excluded khandasari sugar from the purview of VAT.

After the latest order, cotton fabrics, manamade fabrics, textile madeups, curtains, zari, embroidery articles, garments made of handloom and khadi would attract VAT at 4 per cent. The order would come into force with effect from July 11, 2011.

The trade and industry has reacted sharply. "We regret that the State government has not taken into consideration our representations regarding offering level-playing field to our State dealers and industry," Mr Nitin Parekh, Chairman of Trade and Commerce Committee of FAPCCI (Federation of Andhra Pradesh Chambers of Commerce and Industry), told Business Line.

"The government should have given time to enlist the traders concerned. Most of the traders in these business segments are not yet registered as dealers. They need basic orientation on the tax liability and compliance obligations," he felt.