Source: Press Release

Cotton Association of India (CAI) convened a joint meeting of the Presidents and Secretaries of upcountry associations of all cotton growing States in Mumbai on Monday, the 27th November 2017 to deliberate on the issue of Reverse Charge Mechanism (RCM) under GST and to chalk out strategy of finding out a solution to this vexatious problem in close coordination with each other. CAI has about 70 ginners enrolled as its members and therefore, this meeting was convened to understand the problem of RCM also from the ginners’ perspective.

The meeting was chaired by Shri Atul S. Ganatra, President, CAI and the persons present at the meeting included Shri B. Ravinder Reddy, President and Shri Kakkirala Ramesh, Secretary, Telangana Cotton Millers & Traders Welfare Association, Shri Manjeet Singh Chawla, President and Shri Raju Jain, Secretary, Madhyanchal Cotton Ginners & Traders Association, Shri B.S. Rajpal, President, Maharashtra Cotton Ginners’ Association, Shri Anil Somani, Khandesh Gin Press Kharkhandar & Traders Development Association, Shri Omprakash Jain, President and Shri Shantilal M. Ostawal, Secretary, Karnataka Cotton Association and Shri Vinod Jain, Joint Secretary, Madhya Pradesh Cotton Merchants’ Association.

Though Indian Cotton Association, All Gujarat Cotton Ginners’ Association, Saurashtra Ginners’ Association, Andhra Pradesh Cotton Association and the Cotton Association of Orissa could not attend this meeting, they conveyed their wholehearted support for the meeting and that the decisions taken at the meeting will be acceptable to them. 

The plight of the entire cotton sector across the country and the issue of pending refunds to exporters since July 2017 on account of GST were deliberated at the meeting. Shri Ravinder Reddy, President, Telangana Cotton Millers & Traders Welfare Association highlighted the damage caused to the crop and heavy losses suffered by the farmers due to pink bollworm and uncertain rains in Telangana. Shri Reddy added that this matter was engaging the active attention of the State Government.

Shri Manjeet Singh Chawla, President of Madhyanchal Cotton Ginners & Traders Association pointed out that due to RCM, huge funds of ginners were blocked and since cotton seed buyers and the buyers of cotton bales were not paying GST to the ginners this has led to the blockage of huge funds of the ginners.  Shri Chawla requested CAI to take up the matter relating to removal of RCM on kapas.  He also stated that the RCM on cotton has also led to tarnishing relationship between the spinners and ginners.

Shri Omprakash Jain, President of Karnataka Cotton Association stated that unless RCM on cotton is removed immediately there will be no way left to the ginners but to close down their operations.  He appreciated the efforts of CAI in calling this meeting and pointed out that this was perhaps for the first time in the history of the CAI that ginners were provided a platform to discuss their issues.  He thanked the CAI for this juncture. 

Shri B.S. Rajpal, President of Maharashtra Cotton Ginners’ Association stated that RCM has been imposed only on cotton and not on other agri-commodities which is totally unjust. He added that if this RCM continues on kapas it will entail huge losses to the sector.  He also requested CAI to take up the matter relating to removal of RCM with the Government which will also indirectly benefit the farmers in realising better price for their kapas.

Shri Manish Daga, Director, CAI informed that every day about 2700 farmers were diverting from cotton, the most established cash crop in India, to other competing crops. This year cotton farmers have already suffered huge losses due to lots of climatic and pink bollworm problems and if the RCM continues, the cotton farming will substantially reduce in India and adversely affect to the whole textile sector. 

Shri Rajendra Barwale, Managing Director of Maharashtra Hybrid Seeds Company Limited and his team who were present at the meeting made a presentation on the menace of pink bollworm and ways to arrest spread of the same.  The presentation also highlighted the need for continued research for the benefit of the cotton sector.

All members present at the meeting decided that, they would go on one day token protest against RCM on 15th December 2017 and thereafter on an indefinite strike in their respective States by closing shutters from 22nd December 2017 if the issue of RCM was not resolved in the next meeting of the GST Council which is scheduled to be held on 21st December 2017.


  Atul S. Ganatra
Mumbai President
Date : 30/11/2017