The Indian government has announced that it would restore tax rebates on raw cotton and cotton yarn for export, following a review of the industry which has been in trouble recently with the fall in both domestic and international prices of cotton.
The Duty Entitlement Pass Book (DEPB) scheme, which provides tax refunds for exporters, has been reinstated on a retrospective basis on cotton yarn from April this year and on cotton from October 2010.
The DEPB was withdrawn in April last year, and its return has been welcomed by the Confederation of the Indian Textile Industry (CITI).
Shri Shishir Jaipuria, chairman of CITI, said that CITI had asked the government for a relief package in order to tackle losses suffered by the industry because of restrictions on cotton yarn exports, the fluctuation in cotton and cotton yarn prices and the accumulation of stock.
Commerce and Industry Minister Anand Sharma said: “I have taken a composite review of the cotton and cotton yarn industry over the last few days. Both of these segments have faced huge fluctuation in international and domestic prices."
He admitted that cotton exports had been “dis-incentivised” by the export tax in place, and that was the reason for restoring the DEPB.
July 29, 2011
Source: Tax News