A delegation of Cotton Oil Millers' Association (COMA) met Gujarat State Finance Minister Saurabh Patel recently regarding removal of Value Added Tax (VAT) from cottonseed and cottonseed cakes.
After VAT, four percent tax has been imposed on raw-materials and finished products manufactured alleged the trade lobby.
There are over 500 cotton oil mills active in the state, crushing 2,22,500 MT of cotton seeds per annum and producing edible cottonseed oil worth 800 crore and cottonseed cakes that are used as cattle feed worth Rs 1,200 crore.
VAT should be removed from cottonseed and cottonseed cakes as yield of processed stuff is in ratio of 12-15 percent edible oil and 85 to 88 percent cottonseed cakes, if tax is imposed on raw-material then majority of our money will be blocked, said Praful Patel, Vice-President, COMA.
About 12-15 percent of it is recovered from sale of edible cottonseed oil and rest 85 to 88 per cent is drained off, if same tax is not imposed on cottonseed cakes.
If State Government does not remove tax, then it should be imposed on both items to balance our recoveries against tax-money, however, we have urged State Finance minister to remove tax, said Rati Patel, COMA President.
The Minister said its proposal was under consideration, Patel added.
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