A piece of good news has sent a wave of celebrations in Surat’s diamond and zari industries. On Wednesday, Minister of State for Finance Saurabh Patel announced in the State Assembly that both industries will be exempt from Value Added Tax (VAT) which will come into effect in the State from April 1.
People associated with the industries welcomed the decision by bursting crackers and distributing sweets.
It has come as a major relief, especially for zari unit owners who were bogged by four per cent VAT and recession due to hike in prices of raw materials.
Shantilal Jariwala, vice-president of Surat Zari Good Manufacturers’ Association said, ‘‘The industry was reeling under recession and there was the burden of four per cent VAT.
The last year had seen about 1,000 zari units down shutters due to a rise in prices of raw materials and low demand for finished goods in other states. More units were planning to halt operations.”
Jariwala said people from th industry had called a meeting on Wednesday immediately after the announcement on VAT exemption was made in the State Assembly.
He said, ‘‘Such is the joy among zari unit owners that we are planning to felicitate the Finance Minister Saurabh Patel when he visits the city. The government has rescued us from disaster.”
President of Surat Zari Merchants’ Association Devesh Jariwala said, ‘‘We were paying four per cent VAT from our pockets at a time of recession. The government decision has given the industry a fresh lease of life.”
Surat Diamond Industry Association president Muljibhai Dhamelia said, ‘‘The uncertainty over one per cent VAT on the diamond industry is now over with the announcement to exempt it.”
Dhamelia said the diamond industry was 100 per cent export-oriented and the State Government would have gained nothing by imposing one per cent VAT.
He said, ‘‘There was fear among diamond industrialists that implementation of one per cent VAT would invite unnecessary harassment from sales tax officers. But now there is nothing to worry about.’’
Chairman of Gems and Jewellery Export Promotion Council (GJEPC) Chandrakant Sanghvi said, ‘‘We hail the State Government’s generosity. One per cent VAT on the industry would have invited a major change in the functioning of the industry. This is definitely a big day for us.’’