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Yarn-dyed fabric traders in TN protest Cenvat

G. Gurumurthy

It is said that while the handloom and powerloom weavers, especially those operating as job working units, are said to be still unaware of the implication of extension of excise duty to hank yarn, master weavers and major textile traders who place orders for fabric manufacture are the worried lot.

COIMBATORE, March 6

A SECTION of textile traders, especially those associated with the yarn-dyed fabrics produced by the decentralised powerloom industry in Tamil Nadu's Erode and Namakkal districts, have gone on a two-day production stoppage from Wednesday to express their opposition to the extension of `Cenvat' chain to the fabric/processing stages.

Mr Senthamarai, President of the Erode District Handloom Cloth Manufacturers' Association, told Business Line that members of cloth dealers, dyeing and bleaching units and yarn dealers who were `hit' by the introduction of `Cenvat' duty cover in the Budget had responded to the two-day `protest' closure of business establishments called by various trade associations.

The affected sector in the Erode region are the dyeing, bleaching and screen printing units, besides yarn and cloth markets.

The sources said extension of excise duty to hank yarn for the first time and limiting the duty exemption toonly three specific hand processing activities among the textile processing industry in the Budget had led to a lot of commotion in the major weaving centres such as Erode, Salem, Namakkal and Karur districts, besides Coimbatore.

It is said that while the handloom and powerloom weavers, especially those operating as job working units, are said to be still unaware of the implication of extension of excise duty to hank yarn, master weavers and major textile traders who place orders for fabric manufacture are the worried lot.

So also the small and independent textile processing houses in these weaving centres which would be for the first time attracting central excise duty incidence on their processing activity.

The Budget which has extended the eight per cent excise duty on hank yarn as in the case of cone yarn has also brought under the excise duty net for the first time several hand processors (independent processors) who were hitherto exempt from the same.

There are several such independent/small hand processing units operating in Erode and Karur and these units which are to come under the duty net have joined hands with the local handloom weavers (who have to bear the excise duty on hank yarn) to oppose the `Cenvat' duty regime.

The sources said the issue of duty on hank yarn and withdrawal of excise exemption to hand processors was expected to trigger passion among the textile trade circles in these regions as several textile bodies in Karur and Erode districts were planning to hold joint meetings in the two days to chalk out protest programmes.

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