The exemption of 12.36 per cent service tax on loading, unloading, packing, storage or warehousing, transporting by vessel, rail or road of cotton, ginned or baled will benefit cotton trade and industry, ICF President J Thulasidharan said in a statement here.
On an average 25 per cent was the transportation cost incurred by the industry, he said.
Textile industry consumed around 95 per cent of cotton produced in other states and was being transported and around 65 per cent of cost of production was the cost of cotton as raw material, he added.