Warangal: Cotton traders at Enumamula Market yard in Warangal on Friday protested the reverse charge mechanism (RCM) on cotton under the Goods and Services Tax (GST) regime. They asked the officials to discuss the issue at the next GST Council meeting on December 21 or be prepared to face intensified protests. They observed a bandh at the market in accordance with a call given by cotton associations across the country.
The traders asked why cotton, of all the products, was chosen despite it being a non-edible commodity that can be traced till its last form of existence for realisation of taxes, unlike edible commodities. The traders said the instant notification has been issued without proper assessment of its working results and the ramification to the cotton trade.
They urged the government to consider the reactions to the introduction of GST act over the past two months and the numerous difficulties, sweeping changes brought about that never witnessed in history over the implementation of any other fiscal system or policy in the country.
“A move to introduce a fresh point of levy does not go well, as can be seen from the protests going on in different parts of the county. The displeasure is exhibited with bandh calls. In this case, it will hit the farmers as the price of cotton will be affected. The government and the trading community must work together to keep the farmers’ interests at the forefront and keep them on a happy pedestal, but with limitations,” said B Ravinder Reddy, president of Telangana cotton millers and traders welfare association.
“The move to levy tax on purchase will block working capital of trader, in the first instance and later even if he is eligible for possible refund, when export is made, it does not help him as it is a time-tested factor that refunds do not come at a proper time stated or mentioned, but has to cross various unsavory hurdles,” he added. The traders sent a letter to finance minister Etela Rajender appealing him to intervene in the present situation saving the farmers interests of the state.
