South India Spinners Association (SISPA) has asked the Tamil Nadu government to reduce Value Added Tax (VAT) on cotton, cotton yarn and synthetic yarn from five per cent to two per cent to make the state’s spinning industry viable and enhance competitiveness of the smaller spinning units in the state.

In a resolution adopted at its 24th annual general meeting in Coimbatore, SISPA said that CST in neighbouring states was only two per cent, while five per cent VAT in Tamil Nadu has made locally manufactured goods expensive, when sold within or in other states. The association also urged the government to abolish one per cent cess on sale of cotton and waste cotton.

SISPA also appealed to the state government to create a level-playing field among all electricity consumers and allow even small and medium enterprises to purchase power under Open Access System.

It urged the government to provide capital subsidy for purchase of new energy efficient motors and energy saving electrical equipment to make the industry in the state energy efficient.

SISPA president, Varatharajan appealed to the centre to bring down the duty on synthetic fibres (presently at 12.36 per cent) on par with cotton. He pointed out that the country is positioned well to manufacture and supply yarn and fabrics. But inadequate export incentives hampered the trade.