The Gujarat government has reduced VAT on ceramic products from 15 per cent to 5 per cent in the Budget 2016-17. The move could undercut the recent efforts of Rajasthan aimed at building a vibrant ceramic industry as the tax rates in the state still remain high at 14.5 per cent.
Morbi and Himmat Nagar in Gujarat, which have become synonymous with the ceramic industry, heavily depend on Rajasthan for raw materials like clay, silica sand, feldspar, gypsum, limestone, dolomite, wollastonite, etc. But Rajasthan has now realised that if it can attract investments in the sector and utilise its own mineral resources, the spinoffs in terms of job creation, revenue generation and overall industrial development will be significant.
In order to achieve this, the state has not only given ceramics a priority sector status, but also developed a dedicated cluster for the industry in Ghiloth spread over 500 acre.