SIMA Appeals To TN Government For Withdrawal Of VAT Hike On Petrol And Diesel

Industry news

SIMA Appeals To TN Government For Withdrawal Of VAT Hike On Petrol And Diesel

The Southern India Mills’ Association (SIMA) has appealed to the Tamil Nadu state government to withdraw the recent hike in Value Added Tax (VAT) on petrol and diesel.

In a memorandum to the Tamil Nadu Chief Minister, SIMA Chairman M Senthil Kumar said that with the Central Government planning to introduce Goods & Services Tax (GST) from July 1, the industry will benefit if tax rates are not changed till then.

Textile units in Tamil Nadu use diesel generators when there is no power supply. They also transport goods for value addition to different parts of Tamil Nadu as well as other states. Hence, the TN government should withdraw the VAT hike on petrol and diesel, he said.

In Tamil Nadu, he VAT on cotton yarn is 5% as against 2% Central Sales Tax. Further, 1% market cess is levied on cotton yarn.

While these issues were taken up with the Tamil Nadu government in 2012, the then TN Chief Minister Jayalalithaa had assured that these would be studied immediately.

Later, when these long-pending demands were submitted to the TN government again, the industry was informed that since GST is to be implemented soon, changes will not be made in existing levies, he said.

However, textile mills were incurring nearly Rs 6 per kg to transport cotton from other states to the units here, and paid Rs 3 to Rs 5 in order to transport yarn from Tamil Nadu to other states to be woven into fabric, he said.

The textile industry had been facing several problems since 2008 when the power cut crisis hit the units. Several textile mills and weaving units were operating in loss. In such a situation, hiking VAT on petrol and diesel will affect the textile industry, he said.