About one lakh textile traders to shut their shops and establishments across Andhra Pradesh on Tuesday and Wednesday protesting against the levy of 5 per cent VAT (value added tax) on textiles and related items.

Andhra Pradesh government has raised the primary Value Added Tax (VAT) on textiles, garments and all industrial products to 5 percent from the present slab of 4 percent. Even as the textile traders in the State continue to protest the imposition of four percent VAT, the government has gone ahead with issuing an Order to the effect, in Spetember. As a result, the textile and garment entrepreneurs in the State, who have only recently been brought under the VAT regulation, would end up paying one percent additional tax.

Terming the levy of tax arbitrary and illogical, the Andhra Pradesh Federation of Textiles Associations felt that the increase would drive wholesale textile business away to neighbouring States where there was no such tax. Stating that imposition of VAT would lead to increased burden on traders in the form of administrative work and would also result in higher costs to the consumers.