| Date: |
28-07-2011 |
| Subject: |
INDIA: Restores Tax Rebate On Cotton Exports |
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The Indian government has restored tax incentives for raw cotton and cotton yarn exports following a review of the sector over the past few days.
The duty drawback on cotton yarn exports - which offers exporters a refund of import duties - is being backdated to 1 April 2011 and on raw cotton to 1 October 2010.
"I have taken a composite review of the cotton and cotton yarn industry," said newly-appointed textiles minister Anand Sharma, who is also the minister for commerce & industry.
"Both of these segments have faced huge fluctuation in international and domestic prices," he added.
The minister said that cotton exports were "dis-incentivised" in the last cotton year by the imposition of an export tax, which has since been dismantled.
The government action comes after cotton prices endured a period of huge volatility, peaking at INR62,500 (US$1,400) per candy in March before slumping to about INR34,500 now.
Calls for government support have been widespread in the Indian spinning sector, which has resorted to strikes and shutdowns in a bid to reduce cotton stockpiles. An industry association now says the cotton yarn situation is easing.
Source : just-style.com
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