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Related Keywords: all kinds of yarn, except polyester filament, finally announces reduction in VAT rate, liablity of the refund will decrease, new rates would be applicable from Friday, notice issued by excise and taxation department, prove very helpful for hosiery trade, Punjab Government, Punjab Spinners Association, relief for ailing spinning mills

The Punjab Government has finally announced reduction in VAT rate on all kinds of yarn except polyester filament, from 6.5pc to 3.63pc. In this regard, the excise and taxation department issued a notification today.

Additional chief secretary (taxation) DP Reddy, who issued the notification on Thursday evening, said new rates would be applicable from Friday.

This will prove very helpful for the hosiery trade and with this, the liablity of the refund will also decrease. Rate of tax on polyester yarn, polyester chips, staple fibre and its waste acrylic fibre will be 6.05 per cent.

Related Keywords: dumping yarn into Punjab, E-Trip system, increase tax revenue, losing out, other states, Punjab Spinners Association, Punjab Yarn Dealers Association, Punjab yarn industry, reducing VAT on yarn, to cheap yarn

Punjab yarn industry are losing out to cheap yarn coming from other states, making a serious dent on their business volume. After state government rolled back controversial E-Trip system, yarn makers in the state have now pitched for reducing VAT on yarn in order to compete with the commodity from other states.

Punjab levies 6.6 per cent VAT on yarn while some states like Gujarat, Uttar Pradesh, Rajasthan do not impose any tax on it, resulting into “dumping” of yarn into Punjab.