Related Keywords: buget proposal, buying cheaper cotton yarn, governments of Punjab and Haryana, help cotton spinning sector, level playing field for the Punjab based players, lower cost of production, offer incentives to enhance consumption of cotton, safeguard against dumping from other states to Punjab, Tax concession, VAT rate, zero VAT for cotton spinning
Buying of cheaper cotton yarn by fabric and garmenting units located in Ludhiana and Gurgaon from other parts of India had hit local units due to high value added tax (VAT). The tax concessions announced by the governments of Punjab and Haryana in the 2016-17 budget proposals for the cotton spinning sector will help languishing units.
Punjab has 165 spinning mills with 4.25 million active spindles, and consumes 650,000-700,000 bales (a bale is 170 kg) annually. The Punjab government has said the VAT rate on cotton spinning will be 3.63 per cent, from the earlier 6.05 per cent.
