Friday, March 30, 2012

Cotton Traders to Protest New Tax-TIMES OF INDIA

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Cotton traders to protest new tax
TNN | Mar 31, 2012, 01.40AM IST

NAGPUR: Five million cotton farmers of the state who are facing crop losses are now being subjected to need
less restrictions on exports by the Union commerce ministry and recent announcement of the state gove
rnment to impose 5% tax on all raw cotton purchases. Cotton traders, processing plant owners and exporters will
come together and resort to agitation,Vidarbha Jan Ando
lan Samiti president Kishore Tiwari said on Friday.

Tiwari said the traders, cultivators and processors will jointly sit on a protest fast for the day on Saturday at Agrasen Bhavan in Pandharkawda on Saturday. They are demanding freeing cotton exports and providing special incentives for exports and uniform taxation on cotton purchases in India.

Cotton prices in the state fell by around 200 at 3,400 a quintal following the state government's budget announcement of imposing a value-added tax (VAT) of 5% on cotton. The additional tax burden has hit the market sentiment which was already low with the virtual stalling of exports since March 5.

While on the one hand the state government has decided to extend a relief of 2,000 crore to around 5 million cotton farmers after crop failure in more than nearly 40 lakh hectares, it took a harsh measure to put 5% VAT on cotton, said Tiwari.

Prices which were ruling around 4,200 in the first week of March have steadily declined to 3,400 in the current week. "This will only add to economic losses of the already distressed cotton growers," said Tiwari. He has urged the state to roll back VAT and bring it on par with 2% levied in other states.

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