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Govt considers tax exemption for Guj-denim producers
01
Jul '08
The denim industry of Gujarat will enter a new phase in its business operations if the State Government decides to exempt the denim fabric manufacturers from entry tax on polyester texturised yarn (PTY) of coarser count of over 3000 denier and super specialty stretch yarn made from lycra and spandex.

Although manufacturers had demanded for a complete withdrawal of the tax, the Government is still mulling over only an exemption.

Situation remains grim for these manufacturers who have to source the yarn mainly from outside the state since there are no yarn manufacturers of this specialty in Gujarat. They therefore ended up paying an additional entry tax which was introduced by the Government to restrict outsiders from selling yarn in Gujarat markets to protect the local PTY industry.

In an exclusive interview with Fibre2fashion, Mr Ashish Shah, Managing director of Aarvee Denims and Exports Ltd stated, “This type of yarn is not made in Gujarat. Already denim manufacturers are loaded with innumerable taxes and with this additional entry tax product costs were bound to increase. The exemption of tax is still a proposal placed in front of Gujarat Government but it would certainly be a relief if it was approved.”

Industrial sources confirmed that presently denim manufacturers in the state have been buying 1,500 tons per month of PTY and over 300 denier count and specialty stretch yarn made from Lycra and spandex.

The move, if taken, would help denim players save some Rs5 to 10 million per month.

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