Related Keywords: bring down evasion, Central sales tax on yarn is two percent, evasion of duty by powerloom units, five percent on cotton yarn in Tamil Nadu, increase revenue for the government, Maharashtra have two percent, reduction of duty on yarn, Value Added Tax
The Central Sales Tax on the yarn is two percent, while in Tamil Nadu; the Value Added Tax (VAT) is five percent on cotton yarn. Further, fabric is exempted from VAT here. With the high VAT rate on cotton yarn, there is evasion of duty by several powerloom units. They bill the yarn as hank yarn or as fabric to avoid duty.
The Tamil Nadu power loom unit owners have appealed to the State Government to reduce VAT on cotton yarn to two percent.
