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| Concessions to fuming industrialists likely | | | Early Times Reporter
Jammu | June 8
Even though industrialists fumed over a cold shouldered response from the Prime Minister Manmohan Singh during his Jammu as he did not hold out any assurance on rolling back the withdrawal of excise incentives, but the Center government is reportedly working out a mechanism for offering relief to the industrial units.
The industrialists in Jammu and Kashmir had been badly hit by the withdrawal of excise incentives through an order of the Minister of Finance issued in March last. Following this ‘draconian’ withdrawal they had run from pillar to post for relief but all in vain. Even a meeting with the Prime Minister during his Jammu visit in last week of April failed to break ice.
However, sources said, on tough pleading by the Chief Minister Ghulam Nabi Azad, the Central Government is working out a mechanism to offer relief to the industrial units hit by the withdrawal of concessions in excise duty. The worst hit industrial units were those manufacturing pharmaceuticals and Fast Moving Consumer Goods (FMCG). The incentives were withdrawn due to alleged misuse of sops.
Sources said that the units which had borne the brunt of restrictions on excise exemptions available Jammu and Kashmir and North Eastern states can hope for some relief now. The government is looking at some procedural relaxation for the affected units in these states.
All states where the blanket excise exemption was available had registered their protest against the restrictions imposed by the Centre. The government is now examining if some relaxation can be given in terms of procedures to the units located there. A decision on the issue is expected shortly.
Since area-based excise exemptions are prone to rampant misuse, restrictions were primarily placed to check abuse. The benefit is now available only to genuine value-addition activities.
Besides restriction on the tax sop, these units face certain curbs such as mandatory quarterly reporting to the excise department the stock position, sales — whether domestic or exports — along with permanent account number. The proposal deals with giving a breather on this count.
The Centre’s special area-based exemption package aimed at encouraging investments in specific regions is applicable in hill states of north-east, Uttarakhand, Himachal Pradesh, Jammu & Kashmir and Kutch. All manufacturing units set up in these regions between 2003 and 2010 are exempt from excise duty for 10 years and income tax for the first five years, followed by a 50% income-tax waiver in the remaining five years. The total revenue foregone on account of various excise duty exemptions in 2007-08 is about Rs 87,992 crore. |
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