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Indian cotton associations threaten stir over reverse charge

Upcountry associations of all cotton growing states have threatened to hold a token protest on December 15 and go an indefinite strike from December 22 unless the problem of Reverse Charge Mechanism (RCM) is resolved in the coming GST Council meet to be held on December 21. The Cotton Association of India (CAI) convened a joint meeting of the Presidents and Secretaries of upcountry associations in Mumbai on the issue of RCM under GST and to work out appropriate strategies to resolve this issue. The CAI has around 70 ginners as members this meeting was convened to understand this RCM from the ginners’ perspective.

ICA, All Gujarat Cotton Ginners’ Association, Saurashtra Ginners’ Association, Andhra Pradesh Cotton Association and the Cotton Association of Orissa conveyed their support and assured them any decisions taken at this meeting will be acceptable to them. Ravinder Reddy, President, Telangana Cotton Millers & Traders Welfare Association noted the plight of the entire cotton sector across the country and the problem of pending refunds to exporters since July 2017 on account of GST were discussed. Reddy, highlighted the damage caused to the crop and heavy losses suffered by farmers due to pink bollworm and uncertain rains in Telangana.

Manjeet Singh Chawla, President, Madhyanchal Cotton Ginners & Traders Association shared his view that following RCM, huge funds of ginners were blocked and since cotton seed buyers and the buyers of cotton bales were not paying GST to the ginners, this has resulted in blockage of huge funds of the ginners. M. Chawla requested CAI to take up the matter relating to removal of RCM on kapas. He also decried the fact that RCM on cotton has strained relations between spinners and ginners.

 
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