The Hindu Business Line : Sisspa urges lower sales tax on yarn

THE South India Small Spinners Association (Sisspa) has called upon the Tamil Nadu Government to provide fiscal relief by restructuring sales tax (ST), as the spinning industry was a key provider of employment in the rural areas.

The Sisspa has said that a lower sales tax incident on yarn would boost the spinning industry.

The Sisspa President, Mr R. Chinnaiyan, in a statement here has asked the State Government to levy sales tax on net rate of cotton yarn instead of the present system of ST on net rate plus excise duty. Currently, four per cent ST is levied on yarn price that comprises the net rate and excise duty of 9.2%.

Mr Chinnaiyan had also said that at present, the inter-State sale of yarn under the consignment sale route had deprived the State of its revenue. To offset this, the State Government should impress upon the Centre to allow the yarn sale outside the purview of `C' form transaction. In such a case, the State can levy two per cent ST for yarn sold without the `C' form under the inter-State transaction.

Sisspa has also suggested that the sales tax rate on cotton purchased locally and on cone yarn be reduced to two per cent from the four per cent currently. In case of hank yarn, it suggested that the existing two per cent rate be removed.

As for the power tariff, the association has urged the State electricity board to remove the peak hour energy consumption charge. Alternatively, the State Government can increase the subsidised power tariff being extended on the energy consumed by industries during the lean period between 9 p.m. and 6 a.m. from 5% to 20% to match the peak hour power tariff.

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