The state government is contemplating to hike Value Added Tax (VAT) on sale of gold jewellery from the current one per cent to five per cent. “The proposal is under active consideration,” commercial taxes minister Talasani Srinivas Yadav told reporters here on Thursday.

According to Srinivas Yadav, the big jewewllery shops were not paying taxes as per their business. “Though some gold shops have material worth `500 crore and more, they are not paying taxes. The same is  the case with cloth merchants. The proposed hike in VAT on gold will fetch more revenue to the government,” Srinivas Yadav said.

He said during the recent raids conducted by the commercial tax officials on shops and establishments doing ‘zero business,’ the officials realised additional income of `300 crore. “The state government has no intention to harass any trader. The merchants have to pay tax as per their business and involve in the development of Telangana state,” he said.

He said that the officials would conduct field visits at least seven days in a month to see that all merchants pay their taxes, especially in Siddiambar Bazar, Begum Bazar and Charminar areas. “I will also make field visits soon,” Srinivas Yadav said.