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| Finance Department's delay in releasing funds for CGST/SGST claims hampers industrial units | | | Early Times Report
JAMMU, Oct 30: An urgent meeting of the Bari Brahmana Industries Association (BBIA) was convened to discuss the pressing issue of blocked working capital faced by industrial units due to the Finance Department's failure to release funds for the reimbursement of CGST/SGST claims and the refund of turnover incentives. The meeting was presided over by Sh. Lalit Mahajan, President of BBIA, and attended by key members of the association.
Industrial units in the region are grappling with severe working capital constraints as CGST/SGST reimbursement claims, totaling approximately Rs. 25 Crores, remain pending with the Additional Treasury in Gandhi Nagar, Jammu. These funds have been due for release for the past month, despite being duly sanctioned and forwarded by the State Tax Department of Jammu.
Under existing guidelines, reimbursement claims for CGST/SGST should be disbursed within 21 days from the date of submission. However, the delay in releasing funds has led to a significant blockage of working capital, negatively impacting the operational capabilities of industrial units.
In addition to the CGST/SGST reimbursement issue, concerns were also raised about the turnover incentives that have yet to be disbursed by the Industries Department. Pending claims amounting to around Rs. 210 Crores for the financial year 2021-22 have not been released, despite repeated requests to increase the budgetary allocation from Rs. 50 Crores to Rs. 210 Crores.
It is crucial to note that the fiscal incentives announced by the government exist primarily on paper, and industrial units have suffered due to the dilution of incentives in the post-GST regime. The existing units have witnessed a significant reduction in incentives as compared to the pre-GST regime, resulting in challenges in maintaining their viability.
Existing industrial units face difficulties competing with new units that receive more favorable incentives, such as the reimbursement of 300% Gross GST, while existing units are limited to SGST reimbursement based on value addition. Furthermore, the Interstate Turnover Incentive, with a maximum ceiling of 50 lakhs per annum, raises concerns for larger industrial houses that may contemplate shifting their operations to other parts of the country.
The delay in disbursing funds poses a significant challenge for the industrial sector and is hampering employment generation. BBIA has appealed to the Lt. Governor, Manoj Sinha, and Santosh Dattatreya Vaidya (IAS), Principal Secretary of the Finance Department, to intervene and address the issues faced by existing industrial units. The association has also emphasized the need for providing fiscal incentives to both existing units and those undergoing substantial expansion.
The suggested fiscal incentives include:
Providing turnover incentives based on actual reimbursement claims without capping.
Offering GST link incentives to existing units opting for substantial expansion or diversification.
Ensuring the timely release of requisite funds to the Additional Treasury in Gandhi Nagar, Jammu, for the reimbursement of SGST/CGST to industrial units in Jammu & Kashmir. |
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