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| Incentives withdrawal process was set in much before | | Various incentives to investors withdrawn earlier | | Early Times Reporter
Jammu | Apr 2
The process of withdrawal of industrial incentive package to Jammu and Kashmir by the Center which has left thousands of investors in the state licking their wounds has not come abruptly but the process was set in much before from now.
The 2002 special package extended to Jammu and Kashmir on the pattern of the North Eastern states to help attract investors for rapid Industrial growth, besides providing central Excise and Income tax exemption by Finance and Company Affairs Ministry also envisaged fifteen percent subsidy on capital investment on machinery, three percent interest subsidy on working capital and comprehensive Insurance to the Units.
While the 'package' was to remain in vogue for five to ten years, not many would be knowing that the dilution of relaxations started over a year now when the Union Finance Ministry started issuing notices to the investor's withdrawing various incentives.
As per highly placed sources, the Union ministry began with the removal of rebate on Export Goods manufactured in the state, the notice for which was served to the manufacturers way back in December 2006.
Prior to issuance of this notice, the manufacturers use to pay the Central Excise duty, which was subsequently refunded, making the goods so cleared as duty paid and thus qualifying for export rebate.
However, as per the notification, the goods manufactured over here were deemed as non-duty paid goods thus disqualifying the same for export rebate.
Moreover, the investors were never given full income tax rebate, which was extended, to the state for full five years; instead they were made to pay 10 percent income tax even on the profits earned on the goods manufactured in Jammu and Kashmir.
The major blow, which has come recently in the form of a fresh notice has now all most done away with the entire package, restricting the refund of excise duties only on actual " value addition" and not on the sales, as was the earlier practice.
As observers believe that the withdrawal would put a halt on the further investments, it has already put the fate of over Rs 12 thousand crore-investment proposals in pipeline to uncertainty. |
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