The Telangana state government has decided to drop the proposal to impose Value Added Tax (VAT) on sarees and textile products, subsequent to its appeal, said the Telangana State Federation of Textile Associations (TSFTA) on Thursday.

Commercial Taxes Minister Talasani Srinivas Yadav gave this assurance when a delegation from the Federation explained to him the problems that such a levy would result in, including harassment of traders, said TSFTA president Ammanabolu Prakash.

Mr. Prakash thanked Chief Minister K. Chandrasekhar Rao and Mr. Yadav for dropping the proposal. Had the government gone ahead with the proposal, it would have been challenging for the authorities and traders as well to implement it.

Since the products they deal with are not perishable, traders handle stocks received over several months, if not years. Further, textile traders in semi-urban and rural areas are way behind in terms of computerisation of inventory or billing. They continue to do tasks manually considering the costs involved,