Guj denim makers to be exempted from entry tax on PTY

Denim makers have made representations to the state industries department to do away with the tax. However, state government has decided to exempt denim makers from the tax net.

The yarn is mainly sourced from outside Gujarat by these manufacturers who end up paying a five per cent additional entry tax on it.

However, it has been learnt that while the entry tax will not be abolished altogether, denim fabric manufacturers will be completed exempted from it.

Since Gujarat had no yarn manufacturers of this speciality, the government had introduced entry tax to discourage outsiders from selling it in the state and protect the local PTY industry.

The move will save denim players anything from Rs 50 lakh to Rs one crore per month.

"The denim industry had already been suffering from due to input costs. An additional tax of five per cent was the last thing we wanted," said Ashish Shah, managing director of Aarvee Denims and Exports Ltd.

According to industry players, denim manufacturers in the state buy around 1,500 tonnes per month of PTY, over 300 denier count and super specialty stretch yarn made from Lycra and Spandex.

Kiran Panchal, president (marketing fabrics, apparels and product development) of Modern Denim Ltd. had also been reeling under high cotton prices. "Even the yarn manufacturers had increased their prices substantially, leading to more losses for us," he added.

Among the major suppliers of PTY and super specialty yarn outside Gujarat include Reliance Industries, Konark Synthetics and Indo Rama Synthetics, of which the former two run their units from Silvassa.