Tamil Nadu government cancels 1 pc market entry tax for cotton

Chennai

"Under the Tamil Nadu Agricultural Produce Marketing (Regulation) Act of 1987 1 percent is collected as market entry tax for agricultural products. In Tamil Nadu, considering raw cotton, cotton bale and cotton wastes as agricultural products, 1 percent tax is collected as market tax during procurement and during sales. However, only raw cotton should be considered as agricultural produce and cotton bale and cotton wastes should not be considered as agricultural products and so by considering the long term demands of weavers and cotton mill owners the state government will cancel the market entry tax for cotton bale and cotton wastes. An amendment to bring the announcement into effect will be introduced in the ongoing Assembly session", said Stalin, in the announcement made under Rule 110 of Tamil Nadu Assembly Rules.

Stalin also said that Tamil Nadu contributes one third of the garment sales in the country and there are 1,570 spinning mills in the state through which 45 percent of the total cotton yarn for the country is produced. However, 95 percent of cotton bale required for the spinning mills in the state is procured from other states. During the procurement of cotton bales from Indian Cotton Corporation large quantities of cotton bales need to be stored in markets and apart from paying huge transportation costs a large amount is also paid as market entry tax.

After the state government took charge there were demands from weavers to cancel the market entry tax and to consider their demands the state government cancelled the tax.