The Association's demand has taken an ugly turn to the recent spate of raids by the tax authorities including, the Income Tax, Excise and the Department of Revenue Intelligence.

The texturisers from other states hitherto used to issue sales bills for centres other than Maharashtra even when the yarn was routed through yarn merchants of the city. This was mainly due to avoid the state taxations which are relatively higher when compared with the Union Territories like Daman. Even in Silvassa, the main supplying centres of such yarns the levies are lower and texturisers prefer to issue bills ex-Silvassa or ex-Daman.The other major centre supplying yarns is Surat.

Chandrakant Shah, a leading yarn merchant and ex-director of the association told The Financial Express, that the recent raids by tax authoritieshas forced yarn merchants to resort to an indefinite strike as they were directly affected.

He further stated that in several such raids the losses caused to yarn merchants have risen to over Rs 4 crore.

The modus operendi of the polyester texturise yarn spinners located outside Maharashtra is such that they supply the yarn to weavers at Bhiwandi via yarn merchants in Mumbai but the bill is made ex-Silvassa delivery and not in the name of the buyer. The yarn merchants are provided with transport LR (loading receipt) only.

Moreover, heavy under-invoicing is rampant among spinners to escape the revenue net. While the current market price of the polyester texturised yarn is Rs 80 per kilogram, the bills issued are almost half the price at Rs 42.

The Bhiwandi buyers issue payments through cross bearer cheques and route them through yarn merchants who in turn forward them to spinners after deducting their commission. This has led to creation of an unofficial market where none but the yarn merchants areheld responsible with the culprits going scot free.

The monthly polyester texturised yarn business in Mumbai yarn market is around 20,000 tonnes, another leading yarn merchant informed.