Northern India Textile Mills’ Association (NITMA) has welcomed and appreciated the Government of Punjab’s declaration to reduce VAT (Value Added Tax) on cotton and yarn from 6.05 per cent to 3.63 per cent in the State Budget proposed recently. This reduction in VAT will help Punjab’s spinning sector compete in the market, said NITMA’s President Hardyal S Cheema.
The association said in a release that Punjab has close to 165 spinning mills with 4.25 million active spindles with annual consumption capacity of 6.5 million to 7 million bales. Due to higher VAT in Punjab, the textile industry was facing tough times and weaving industry preferred to purchase yarn from spinners from Himachal, UP and Uttrakhand. The spinners from neighbouring states used to sell it at 2 per cent VAT.
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This move of the State Government of Punjab will surely benefit many in the industry as the state has been going through a rough patch from the past many months. First the not so cold weather hindered order placements for the sector, and then the Master Plan proposed by the Government that tags garmenting hubs of Punjab, like Shivpuri, Haibowal, Sunder Nagar, Kundan Puri and Chander Nagar, among others as ‘residential’, disturbed the sector badly.