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Related Keywords: attract more investors in textile sector, ban on second-hand clothes, boost Made in Rwanda campaign, create jobs, effective second of December lose billions of francs in taxes, import duties, importation of textile raw materials, increase production, quality and quantitiy, Rwanda government, tax exemption, Value Added Tax, VAT

Rwanda government to boost Made in Rwanda campaign has announced tax exemption for importation of textile raw materials and leather, it applies to both import duties and Value Added Tax (VAT) which is effective from Friday, December 2, 2016. Although this move will see government lose billions of francs in taxes that it was getting from leather and textile imports, in the long run the government hopeful that it will boost the Made in Rwanda campaign.

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.

Related Keywords: central sales tax, compared to production cost, for yarn and prices remaining low, hit due to market slowing down, South India Spinners Association, southern region, Textile mills, Value Added Tax

Textile mills in the southern region for the last six months are hit due to the market slowing down for yarn and prices remaining low, compared to the production cost. Further, textile units in the State also had to pay higher value added tax (five percent) compared to central sales tax (two percent) according to the South India Spinners’ Association.

Yarn made in other States and sold here was priced lower than the yarn made by the mills in the Tamil Nadu State.

Related Keywords: entry tax, Ludhiana, Punjab Government, textile and hosiery industry, Value Added Tax

The Punjab government has apparently decided to impose Non-Vatable Entry Tax on yarn being brought in from other states, including Uttar Pradesh, Himachal Pradesh and New Delhi. As there were repeated requests and memorandum coming from spinners in the state asking to either reduce VAT on yarn manufactured in the state or impose restrictions on import of yarn from other states.