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Khadi and Village Industries seek VAT exemption

PTI - New Delhi

The Khadi and Village Industries Commission (KVIC) sought exemption on its products from the value added tax proposed to be levied from next month and said it will approach all state governments as well as the Centre on the exemption issue.

Stating this here at a press meet on the forthcoming ‘National convention on rural industrialisation’, the KVIC chief Mr Mahesh Sharma said, “We have taken a very strong position in this regard (VAT exemption) and we have also approached the finance ministry empowered committee on VAT to consider the issue.” He said the commission has also asked various states to provide exemption to the khadi and village industries. “We have received positive responses to our demand from various states like Uttaranchal, Kerala, Rajasthan and Jharkhand which have assured providing VAT relief to this sector,” he said.

Mr Sharma said it was not logical to impose tax on a sector which had engaged people from weaker, rural and even tribal sections of the society. Responding to a query on declining employment in the sector, Mr Sharma said, “Though the traditional markets of oil workers, potters and weavers were facing threat of employment, it has been reported that the sector is generating over 1,000 new jobs every day.”

Employment generated in this sector was 62.64 lakh during the last fiscal, he said, adding over 1,52,509 new units were set up which means hundreds of new jobs were being created.

Highlighting on the growth rate of the sector, the KVIC chief said the net turnover of KVIC has been estimated to cross Rs 10,000 crore for this fiscal which stood at Rs 9,000 crore last fiscal. Over 10,000 new units have been set up in the states of Maharashtra, Uttar Pradesh, Kerala, West Bengal, Andhra Pradesh, and Rajasthan and in the last five years over 16.07 lakh jobs were created by the commission.

Speaking about the convention, which was held on March 14 this year, he said, over 1,100 participants attended the three-day event, which deliberated on issues related to the khadi programme, rural employment, role of science and technology and marketing initiative and artisans upliftment.

KVIC is expected to sign over seven agreements with leading institutions like IIT and NID, it is learnt.