After receiving tax recovery notices dating back to 2010, cotton ginners in India’s Punjab have gone on an indefinite strike against the state government order. Members of the Punjab Cotton Factories and Pressing Association have also decided not to purchase seed cotton from farmers till the state withdraws the notices.
This is expected to impact cotton arrivals in the Indian state and cotton farmers may be forced to sell seed cotton in neighboring states if the strike continues for long. The state government had levied a one percent Punjab Infrastructure Development Fund (PIDF) cess on the sale price of agricultural produce from the first buyer. The cess was levied in 2010 but withdrawn in 2014. However, the state did not collect the cess from the ginners at that time hence the notices now.
The ginners association argued that they did not collect the one percent cess from their buyers and hence were not in a position to pay it. However, the state government said that the ginners were bound to collect the cess between 2010 and 2014 and deposit it in the state treasury.