Govt scraps customs duty on cotton imports

Wed, Jul 9 07:26 PM

New Delhi, July 9 (PTI) The government today scrapped import duty on cotton and withdrew incentives on exports to boost domestic supply for the textile industry. "The 10 per cent customs duty on cotton imports has been abolished along with 4 per cent special additional duty with effect from July 8.

Besides, one per cent drawback benefits (refund of local taxes) on exports of raw cotton have also been withdrawn," Joint Secretary in the Ministry of Finance Vivek Johri said. The abolition of customs duty is expected to result in revenue loss of Rs 100 crore in the remaining months of the current fiscal, though removal of export incentives would partly set off these losses.

About 3,000 yarn mills had announced to go on a strike today pressing for their demand to abolish customs duty on cotton imports and regulation of exports. While welcoming the decision of the government, Deputy Chairman of Southern India Mills Association J Thulasidharan said, "Since the strike call had already been given, workers have not turned up.

" Textile Ministry has been pressing for scrapping the customs duty saying that textile exports remained at about 20 billion dollars against the target of 25 billion dollars in 2007-08 mainly due to rise in input costs like a hike in cotton prices. According to industry estimates, the decision would not have any major impact on cotton producers, as the production has gone up to 35 million bales (One bale = 170 kg) as against 30 million bales in the previous year due to wide plantation of BT cotton.

PTI.

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