Tamil Nadu Agricultural Market Committee started levying 0.5% Cess on Cotton and Cotton Waste since 1959 and the same was increased to 1% from the year 1987. The Cess has to be paid on every sale of cotton produced out of Tamil Nadu, any rejected bales sourced from other States and also on Cotton Waste, a bi-product generated while producing yarn in the spinning mills. Tamil Nadu which accounts around 45% of the spinning capacity including 80% of the SSI spinning units, around 50% of the open-end spinning units, handlooms and powerloom weavers across the Tamil Nadu especially, Coimbatore, Tirupur, Erode, Salem, Namakkal, Karur, Madurai, Virudhunagar, were affected with this 1% AMC Cess. No other state in the country levies Cess on Cotton Waste.

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