Posted: Wednesday, May 05, 2010 at 0214 hrs
Union Textile ministry’s order withdrawing the four to five per cent duty drawback provided to cotton yarn exporters is the second shock for the exporters in the past one month. Last month, duty entitlement passbook (DEPB) worth 7.67 per cent on the total sales was also withdrawn on cotton yarn exports. Ashish Bagrodia, president of Northern India Textile Mills Association (NITMA), said this is an effort to curb exports.
The smaller players — the end users of the cotton yarn have, however, welcomed the move. They had earlier presented their problem before the Union Textile ministry that yarn manufacturers are increasing the prices of cotton yarn in the domestic market in an arbitrary manner.
In the past three months, the prices had increased from Rs 140 per kg to Rs 175 per kg, however, from May 1 Rs 5 per kg was reduced from the cost of yarn. Bagrodia said the government’s decision to withdraw duty drawback for cotton yarn is very unfortunate and unfair. The move is also inequitable as all other export products are eligible for the refund of duties and the sudden withdrawal will have long-term implications for the healthy development of the sector in future, he claimed.
News source is http://www.indianexpress.com/news/