Vidarbha Cotton Association Seeks Mandi Cess Waiver and GST on Cotton Seed Cake (khal)
2024-10-03 13:48:44
The Vidarbha Cotton Association wants GST on cotton seed cake (khal) and a waiver of the mandi cess.
The Vidarbha Cotton Association (VCA), representing farmers and ginners in the region, has called attention to key issues affecting the cotton industry. During Union Textile Minister Giriraj Singh’s recent visit to Nagpur, the association submitted a charter of demands outlining their concerns.
One of the main requests is for the waiver of the mandi cess on cotton, particularly for cotton transported directly to factories without passing through mandi premises. The VCA argued that farmers receive minimal benefits from mandi services in such cases, as all necessary transactions occur at the factory. The association claims that this mandi tax, which varies across different mandis, imposes an unnecessary burden on farmers, leading to reduced cotton prices. "Waiving the mandi cess would enable farmers to secure better prices for their cotton, thereby improving their income," the letter stated.
Additionally, the VCA is advocating for the imposition of a 4% GST on cotton seed cake. Currently exempt from GST, cotton seed cake is a key input in agriculture and animal husbandry, but its tax-free status complicates tax procedures for businesses. The association believes that imposing a 4% GST would streamline tax operations, promote transparency, and align with a more unified tax structure.*
The VCA also pointed out that the absence of GST on cotton seed cake triggers the reverse charge mechanism (RCM) on cotton, creating cash flow challenges for traders and ginners, who face reduced working capital after paying GST under RCM. Introducing a 4% GST on cotton seed cake would eliminate the need for RCM on cotton, easing financial strain and simplifying operations for traders and ginners, according to the association.
