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  1. GST impact: Cotton ginners go on strike over 5 pct reverse charge mechanism

GST impact: Cotton ginners go on strike over 5 pct reverse charge mechanism

Cotton ginners from across the country observed a day’s strike over the goods and services tax (GST) on Friday.

By: | Published: December 16, 2017 1:28 AM
Cotton ginners, GST, Cotton Association of India, CAI, Central government Cotton ginners from across the country observed a day’s strike over the goods and services tax (GST) on Friday.

Cotton ginners from across the country observed a day’s strike over the goods and services tax (GST) on Friday. Under the leadership of Cotton Association of India (CAI) over 4,000 ginning units were closed to protest and pressurise the central government. However, Gujarat which is the largest cotton producing state, has seen mixed response to the strike.  On the other hand, Maharashtra, Madhya Pradesh Orissa, Telangana, Karnataka and Andhra Pradesh based ginners have observed a total shutdown. According to CAI, ginners will go on indefinite strike if GST Council will not address the issue in its next meeting on  December 21. “We have written six letters to the GST Council to resolve the issue in last one month but the Council has not responded.  “To bring the government’s attention to this issue, we have decided to go for one day symbolic strike before the Council meeting,” said Atul Ganatra, president of CAI. In November this year, 5% GST was imposed by the government under the reverse charge mechanism (RCM).

The notification says that the GST on supply of raw cotton or kapas by agriculturist will be liable to be paid by the recipient of such supply under the RCM, thereby affecting the ginners and cotton traders. Earlier, the government had postponed the implementation of the RCM till March 31, 2018. “Government has imposed 5% GST under Reverse Charge Mechanism (RCM) only on cotton. Though, it is refundable but our experience is not good in it.  Refund is not coming in time and it will impact our operational margins. GST Council is going to meet at the end of this month and if the Council doesn’t remove it, the ginning industry will go on an indefinite strike,” said Arvind Patel, vice president of Saurashtra Ginners Association (SGA).

Bhupendra Singh Rajpal, president of Maharashtra Cotton Ginners Association, said, “It is season time and due to the strike, about `400-450 crore of transaction in the industry has been affected. This is not good for farmers.”

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