Govt Abolished Customs Duty On Import Of Cotton
Yielding to the demand from the textile industry, the government has abolished customs duty on import of cotton, which recently saw sharp rise in prices.The cotton imports attracted 10 per cent basic customs duty and 4 per cent special additional duty.“The customs duty on all types of cotton imports has been abolished along with special additional duty. Besides, drawback benefits (refund of local taxes) on exports of raw cotton have also been withdrawn,” a senior finance ministry official said on Wednesday.A notification has also been issued in this regard by the Central Board of Excise and Customs.While welcoming the decision of the government, deputy chairman of Southern India Mills Association J Thulasidharan said, “since the strike call had already been given, workers have not turned up.” The cotton prices have gone up by more than 42 per cent since January this year, adding to cost of textile industry.Textile ministry was also pressing for scrapping of customs duty. The industry official said the move would not adversely affect cotton growers since no stocks have been left with them.
Meanwhile, mills remained closed in Coimbatore, Erode, Karur, Madurai, Virdhunagar, Thoothukudi Nammakkal and Salem.The strike was called by Southern India Mills's Association (SIMA), Tamil Nadu Spinning Mills' Association (TASMA), South India Small Spinners' Association (SISSPA), Madurai Spinners Association (MSA), Annur Spinning Mills Association (ASMA) and India Spinning Mill Owners' Association.“The strike was total. Around 4500 small, medium and large scale textile mills across the country extended full cooperation by stopping production.
While the total national production loss due to the strike was Rs 500 crore, the loss was estimated at Rs 200 crore in Tamil Nadu,” Thulasidharan said, adding that not only did the mills suffer production and trade loss on Wednesday, the government also lost huge revenue in terms of electricity charges and sales tax.The textile mills associations, which employ over 3 lakh workers and account for 45 per cent of the country's spinning capacity, said that multinationals and traders who purchased cotton from farmers below Rs 20,000 per candy in January now sold it for Rs 30,000.
The current year's cotton production was 316 lakh bales of which 100 lakh bales were exported, paving the way for shortage in the local market. It clearly showed the domination of the cotton market by MNCs.In order to operate the mills, the associations jointly demanded a ban on export of cotton until December 31. The mills associations have thanked the Central Government for withdrawal of customs duty and additional customs duty.Thulasidharan said the move would help control the prices of cotton. “It will facilitate the industries to source cotton from wherever it is available at affordable price.”
