Jaya urged to exempt VAT for cotton textiles for two years

Coimbatore, Jul 13: Southern India Mills Association (SIMA) on Tuesday, Jul 12 appealed to Tamil Nadu Chief Minister, Jayalalithaa to exempt or provide optional route, as prevails in the case of Central Excise, for raw cotton and cotton textiles, right from yarn to finished goods from VAT for a period of two years.

The increase in VAT rate on raw cotton from four to five per cent would discourage any cotton development in the State, as it was expensive for the mills, as the CST was only two per cent, SIMA Chairman, J Thulasidharan said in a press release here.

Moreover, one per cent Market Committee Fee on cotton and cotton waste was also an additional burden to the textile mills in Tamil Nadu, he said.

Spinning mills in Tamil Nadu were in a disadvantageous position due to the absence of raw material base, incurring Rs four to Rs five for bringing cotton from states like Gujarat, selling over 60 per cent of yarn in upcountry by spending equal amount for transport, he said.

Huge spinning capacity being created in the cotton growing states was also threatening the very survival of the mills in Tamil Nadu, Thulasidharan said.

PTI