Only 4 per cent VAT on sugar, textiles

HYDERABAD: The State government has decided not to further pinch the aam aadmi who has been hit hard by the recent fuel and LPG price hike.It has decided to collect value-added tax (VAT) of only 4 per cent on sugar and textiles. In other words, it means the prices of both will not rise.According to sources, the government, though it had the option of collecting up to 14.5 per cent VAT following removal of additional excise duty by Centre, has decided against imposing the same.By doing so, it stands to lose a revenue of Rs 600 crore.With effect from April 1, the Central Government has removed both sugar and textiles from the Additional Excise Duty list. As a result, there was confusion among traders on whether both items were liable for VAT at the rate for other goods. The government has decided to include sugar and textiles under the lowest tax liability at 4 per cent on par with other common items.