Punjab Spinners Association approaches Punjab Ministers: Vyas

Ludhiana, August 8, 2014: Punjab Spinners Association led by its president Madan Mohan Vyas, approached Madan Mohan Mittal, Minister of Industries & Commerce, Punjab and Anil Joshi, Minister for Local Bodies, Medical Education and Research, Punjab in which he explained all the problems being faced by yarn spinners in the state.
Both the ministers appreciated the concerns and assured of full support. They also assured Vyas that they are going to raise all the issues with Chief Minister and Deputy Chief Minister.
The Punjab Spinners Association has been requesting Government of Punjab to reduce the rate of VAT from 6% to 2% or ban the import of yarn into the state of Punjab through exemption certificate for not paying the advance tax.
The tax disadvantage to the yarn spinners located in Punjab has further compounded the problems of spinners in Punjab as the Power tariffs, wages & logistics costs in Punjab are already amongst the highest in the country.
The yarn spinning industry in the state is not able to utilise its full capacity which has been created at huge investment, primarily as customers located in Punjab, have started buying yarn from other states as it works out to be cheaper due to difference in tax incidence.
Yarn spinners of Punjab are forced to sell their products in other states due to tax differential by paying extra freight cost and other related costs.
Association is of the view that lower utilization of capacity by yarn spinners of Punjab and investments outside the state is something very alarming and needs to be handled without any further loss of time.
Association feels that it will be much better on the part of Government of Punjab to ensure usage of this cotton within the state of Punjab to continue employment generation. Government of Punjab is giving a subsidy of Rs.7600 crores to the farmers of Punjab whereas value of cotton produced in the state of Punjab is about Rs.4000 crores.
The Punjab yarn spinners need to be given level playing field by reducing VAT to 2% or imposing a ban on the imports through exemption certificate for not paying the advance tax or through some other suitable options which the government deems appropriate. If the Government of Punjab can’t consider reduction in VAT it must ensure that the yarn from the other states enter the state of Punjab by paying equal entry tax in whatever form Government thinks fit.
The Government of Punjab needs to appreciate that textile, in general, is in a highly recessionary & crucial phase and if the exemption on advance tax on yarn coming from other states continues, spinning industry’s competitiveness in Punjab can seriously decline further to a point of no return.