Mr S Dinakaran, Chairman, SIMA has stated that he met the Hon’ble Chief Minister today at Chennai and submitted a memorandum seeking various relief measures to revive the ailing textile industry from the crisis and regain its global competitiveness. He has stated that the Hon’ble Chief Minister gave a patient hearing to the submissions and promised to take necessary steps immediately. He has mentioned that the Hon’ble Chief Minister has also assured to sustain the competitiveness of the Tamil Nadu textile industry and avoid any investment migrating to other States.
SIMA Chairman has profusely thanked the Hon’ble Chief Minister for extending the VAT exemption on furnace oil meant for captive power generation up to 31st May 2013, which expired on 30th September, 2012. Mr. Dinakaran has stated that this would greatly benefit many large scale textile mills having furnace oil captive power plants to mitigate their power crisis.
He has also thanked the CM for reducing the VAT on diesel gensets from 14.5% to 5% and also reducing the margin money for TIIC loan from 20% to 10%. SIMA Chairman has stated that the benefits given for diesel gensets would largely help the Small and Medium textile mills, power loom units, etc., to generate captive power and minimize the losses.
SIMA Chief stated that the Association has also sought two-year VAT holiday on cotton cone yarn and high speed diesel oil meant for captive power generation. Mr. Dinakaran has said that 5% VAT on cotton cone yarn makes the textile mills in Tamil Nadu uncompetitive when compared to the textile units in other States which are able to procure yarn with 2% CST.
He has added that Tamil Nadu spinning mills are also not able to compete with the mills in neighbouring States, particularly Andhra Pradesh which sell their yarn in Tamil Nadu with 2% CST. Mr. Dinakaran has stated that the VAT holiday for two years would enable the mills in Tamil Nadu to sustain its competitiveness. He said that Hon’ble Chief Minister was positive both on VAT holiday on cotton cone yarn and high speed diesel oil meant for captive power generation and promised to take steps shortly.
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