Home / Knowledge / News / Textiles / SIMA appeals CM to exempt cotton textiles from VAT
SIMA appeals CM to exempt cotton textiles from VAT
13
Jul '11
The predominantly cotton based textile industry in Tamil Nadu has been facing a grave crisis for the last four months due to abnormal drop in cotton and yarn prices, sudden glut in the domestic and international market, huge accumulation of yarn stock, closure of dyeing units in all textile clusters including Tirupur due to pollution problem, acute power shortage, etc. The spinning sector which accounts for 47.5% of the spinning capacity, 60% of yarn export of the country, employing over 6 lakh people has incurred over Rs.5,000 crores loss during the last four months.

In order to minimize the losses, the spinning sector across the country has cut the production by 35% from May 24, 2011 onwards and recently hundreds of small and medium mills have stopped production 100%.

The industry has appealed to the Hon'ble Prime Minister to announce a bail out package consisting of 2 years moratorium for repayment of loans, restoration of DEPB and drawback with retrospective effect, 4.5% interest subvention for export packing credit, conversion of CC limits into term loans, special working capital assistance, etc., to avoid NPAs and make the industry to survive in the short run. Under these circumstances, the increase in VAT rates announced by the Government of Tamilnadu has become a last straw on the camel's back.

In a press release issued, Mr J Thulasidharan, Chairman, The Southern India Mills Association (SIMA), has said that the spinning mills in Tamilnadu is already in a disadvantageous position due to the absence of raw material base, incurring Rs.4 to Rs.5 per kg for bringing the cotton from the States like Gujarat, selling over 60% of the yarn in upcountry by spending equal amount for transport, etc. He has stated that the new investment in modernization and green field projects in Tamilnadu have already become dormant due to power shortage and high logistics cost.

He has added that huge spinning capacity is being created in the cotton growing States threatening the very survival of the textile mills in Tamilnadu. Mr.Thulasidharan has also pointed out that the increase in VAT rate on raw cotton from 4% to 5% would discourage any cotton development in the State, as it is expensive for the mills as the CST is only 2%. SIMA chief has further said that 1% Market Committee fee on cotton and cotton waste is also an additional burden to the textile mills in Tamilnadu.

Therefore, SIMA Chairman has appealed to the Hon'ble Chief Minister of Tamil Nadu 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 to enable the industry to avoid further closures and regain its competitiveness in the open market.

The Southern India Mills Association (SIMA)


Must ReadView All

ITC, ICS tie up to help Moroccan textile value chain

Textiles | On 21st Apr 2018

ITC, ICS tie up to help Moroccan textile value chain

The International Trade Centre (ITC) has partnered with ICS, which...

Bangladesh garment manufacturers call for fair pricing

Apparel/Garments | On 21st Apr 2018

Bangladesh garment manufacturers call for fair pricing

Bangladesh garment manufacturers want a ‘commensurate adjustment’ by...

Pak ministry proposes extension to PM package for 2018-19

Textiles | On 21st Apr 2018

Pak ministry proposes extension to PM package for 2018-19

Pakistani textile ministry has reportedly proposed extending the...

Interviews View All

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Md Hanifur Rahman
Aman Group

The level of understanding the job role and organisational requirements...

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


April 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.9%
No
12.6%
Skip
17.5%

Total Votes: 103

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.1%
No
29.1%
Skip
7.8%

Total Votes: 103

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.4%
No
8.7%
Skip
3.9%

Total Votes: 103

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
7.8%
Skip
9.7%

Total Votes: 103


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search