Cotton ginners not to start ops unless VAT, market fee issues addressed

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Cotton ginners have announced not to start operations this season unless the Haryana Government addresses their grievances regarding VAT refund and reduction of the market fees.

The ginners also want ‘Kutcha arhtiyas’, the commission agents in grain markets, to be excluded from purchasing raw cotton from farmers.

Ginners, who met in Sirsa yesterday, want the market fee plus the Haryana Rural Development Fund (HRDF) on cotton reduced from 4 per cent to 1.6 per cent as was being done since 2011-12 and refund of extra VAT they will have to pay on raw cotton in the wake of the government’s waiver on cottonseed and oilcakes.

“The market fee and the HRDF on cotton was reduced from 2 per cent each to 0.8 per cent by the Congress government to bring it at par with the neighbouring states. Since then, the government issues a notification for this purpose every year. However, no notification has been issued this year so far,” said Sushil Mittal, president of the Haryana Cotton Ginners Association.

Mittal maintained the National Agriculture Marketing (NAM) initiated by Prime Minister Narendra Modi has a provision for farmers selling their produce directly to millers without the involvement of commission agents.
Virender Gupta, secretary of the association, said that with the central government waiving 5 per cent VAT on cottonseeds and 2 per cent on cottonseed cakes, the millers would not be able to recover VAT they pay while purchasing raw cotton from farmers.

“Unless the Excise and Taxation Department allows us refund of the extra VAT, the burden of making these commodities tax-free will shift on 150-odd ginners of the state, which is not justified,” said Gupta.

Sources said that the collection of fee from cotton has dwindled in the past four years from Rs 36.53 crore in 2012-13 to Rs 29.80 crore in 2013-14, Rs 16.28 crore in 2014-15 and Rs 8.65 crore in 2015-16.

J Ganesan, Chief Administrator of the Haryana State Agriculture Marketing Board said he had received a representation from the ginners but the decision on this issue will be taken at the highest level.