Punjab ginners want reduction in market fee and other taxes
October, 09th 2007
As Punjab cotton farmers sell their produce in other states due to higher market fees in their home state, Punjab Cotton Factories and Ginners Association has sought state government's intervention to redeem the situation.
"Almost fifty per cent of our ginning capacities are lying idle on account of non-availability of enough cotton from the state mandis as cotton growers are selling their produce in Rajasthan and Haryana for fetching high returns," The Association's President Bhagwan Bansal said.
Each farmer has to pay Rs 200 per quintal on cotton as taxes which include 2 per cent market fees, 2 per cent rural development fund, 4 per cent VAT and 1 per cent cess in Punjab, Bansal said.
"As a result of it, farmers are finding it lucrative in selling their cotton in other areas such as Dabwali, Sirsa, Sri Ganganagar instead of selling in Punjab," he said, adding the trend would hit the cotton ginners very hard.
Comparing the tax structure with that in Rajasthan, Bansal said that it had recently reduced its market fees from 1.60 per cent to 0.80 per cent.
On account of the sale of cotton in neighbouring states, Punjab would face shortage of the same, besides a significant loss of revenues to the state government, he said.