Cotton ginners in Haryana have sought a reduction in market fee and a full tax refund, arguing they will not be able to get raw cotton for ginning. Ginners say the state government has not reduced market fee on cotton this season. The four per cent levy will render them uncompetitive and hit business. They want rationalisation of VAT on cotton by ensuring refund of full tax on inter-state sale of cotton.

The Haryana government has issued a notification whereby ginners will not be able to claim about two per cent tax out of the 4.20 per cent value added tax paid on cotton while selling it to other states. Ginners say this will prove disadvantageous for them. They claim that out of the cotton output of 20 lakh bales, only three to four lakh bales are consumed within Haryana while the rest are sold to other states.

Haryana’s new industrial policy has a provision giving 100 per cent exemption from market fee to a new ginning unit. Existing ginning units say this is unfair. Ginners have also demanded they should not be charged fixed rates for power consumption for the whole year. They say the cotton ginning sector is operational for only six to seven months in a year.