Faced with stiff opposition from the trading community, the Delhi Government finally passed its Rs-46,600-crore Budget 2016-17, with certain amendments withdrawing 5 per cent VAT (value-added tax) on shoes priced below Rs 500 and all kinds of fabric, which had earlier been proposed by Deputy Chief Minister Manish Sisodia.
Delhi-based textile traders and the industry at-large had strongly opposed to the 5 per cent VAT, demanding that government took back this step. Now, with the VAT withdrawn, traders here are happy.
So much so, the Delhi government had also been faced with political pressure from the Bhartiya Janta Party (BJP), whose state wing had opposed this move by the AAP-led government, maintaining that this goes against the interests of the common man.
Delhi’s Chief Minister Arvind Kejriwal has said that within 24 hours of tabling the budget, they had gone back on their decision to impose the 5 per cent VAT. “On Monday, we presented the budget. After traders raised their issues to us yesterday, we withdrew our decision the very next day. We accepted our mistake after meeting a delegation of cloth traders. Our government is proactive, we take fast decision in view of people’s welfare,” Kejriwal maintained.
Also Read – Delhi budget offers lower VAT on branded garments
Earlier, Sanjiv Mehra, who is the President of Khan Market Traders’ Association, said, “Wholesalers tell me that with the raw materials are costing 5 per cent more, the finished products would cost 5 per cent more as well. Buyers would look towards Gurgaon and other parts of Haryana because of this, and Delhi would lose out on its distribution character.”
Manufacturing hubs like Surat, Mumbai, Erode etc levy no blanket VAT on textiles and fabrics.
Bharat Tex Special Report 2026 
