Cotton traders to go strike against RCM under GST

Trade body Cotton Association of India (CAI) has threatened to go one day protest on December 15, followed by an indefinite strike against Reverse Charge Mechanism if the GST council does not resolve the issue in its meeting scheduled on December 21.

All members present at the meeting decided that, they would go on one day token protest against RCM on 15th December 2017 and thereafter on an indefinite strike in their respective states by closing shutters from 22nd December 2017 if the issue of RCM was not resolved in the next meeting of the GST Council which is scheduled to be held on 21st December 2017.

Cotton Association of India (CAI) convened a joint meeting of the upcountry associations of all cotton growing states in Mumbai this week to deliberate on the issue of Reverse Charge Mechanism (RCM) under GST and to chalk out strategy of finding out a solution to this vexatious problem in close coordination with each other.

CAI has about 70 ginners enrolled as its members and therefore, this meeting was convened to understand the problem of RCM also from the ginners’ perspective. The meeting was chaired by Atul S. Ganatra, President, CAI.

The plight of the entire cotton sector across the country and the issue of pending refunds to exporters since July 2017 on account of GST were deliberated at the meeting. Ravinder Reddy, President, Telangana Cotton Millers & Traders Welfare Association highlighted the damage caused to the crop and heavy losses suffered by the farmers due to pink bollworm and uncertain rains in Telangana. Reddy added that this matter was engaging the active attention of the state government. Manjeet Singh Chawla, President of Madhyanchal Cotton Ginners & Traders Association pointed out that due to RCM, huge funds of ginners were blocked and since cotton seed buyers and the buyers of cotton bales were not paying GST, this has led to blockage of huge funds of the ginners.

Chawla requested CAI to take up the matter relating to removal of RCM on kapas. He also stated that the RCM on cotton has also led to tarnishing relationship between the spinners and ginners.

Omprakash Jain, President of Karnataka Cotton Association stated that unless RCM on cotton is removed immediately there will be no way left for the ginners but to close down their operations. He appreciated the efforts of CAI in calling this meeting and pointed out that this was perhaps for the first time in the history of the CAI that ginners were provided a platform to discuss their issues.

B.S. Rajpal, President of Maharashtra Cotton Ginners’ Association stated that RCM has been imposed only on cotton and not on other agri-commodities which is totally unjust. He added that if this RCM continues on kapas it will entail huge losses to the sector. He also requested CAI to take up the matter relating to removal of RCM with the Government which will also indirectly benefit the farmers in realising better price for their kapas.

All members present at the meeting decided that, they would go on one day token protest against RCM on 15th December 2017 and thereafter on an indefinite strike in their respective States by closing shutters from 22nd December 2017 if the issue of RCM was not resolved in the next meeting of the GST Council which is scheduled to be held on 21st December 2017.

B.S. Rajpal, President of Maharashtra Cotton Ginners’ Association stated that RCM has been imposed only on cotton and not on other agri-commodities which is totally unjust. He added that if this RCM continues on kapas it will entail huge losses to the sector. He also requested CAI to take up the matter relating to removal of RCM with the Government which will also indirectly benefit the farmers in realising better price for their kapas.