By admin       2017-11-24

Rajkot: Ginning associations across Saurashtra have threatened to stop buying cotton from agents from Friday to oppose reverse charge mechanism (RCM) under the Goods and Service Tax (GST). During the last meeting of GST Council, it was decided to levy five per cent RCM on ginning industry. All cotton farmer have an agent who is associated with a ginning mill. The agent finalises the deals between farmers and ginning mill. But with levy of 5% RCM, the ginners will have to pay the charge on cotton procured from agents and then claim refund from the government. There are more than 700 ginning units in Saurashtra which have decided to stop buying cotton. They say that they can't afford to invest working capital to pay five percent RCM. They are demanding a practical solution of the issue. President of Saurashtra Ginners' Association Bharatsinh Vala said, "We get GST set off for domestic sales. But exporters don't want to pay five per cent RCM to use because they have to claim refund which is a very tedious job and refund is not paid on time. We also have to claim refund that too is a tedious process." Before GST regime there was no VAT levied on ginners. This year Gujarat's cotton production is 1 crore bales (one bale equals 170 kg), out of which 50 per cent is likely to be exported.

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