Kashmir industrialists call Centre’s tax exemption decision 'discriminatory'

Surprised how J&K CM, other ministers welcomed decision when it is going to benefit only handful of units: FCIK

GKNN
Srinagar, Publish Date: Aug 19 2017 12:21AM | Updated Date: Aug 19 2017 12:21AM
Kashmir industrialists call Centre’s tax exemption decision 'discriminatory'File Photo

Calling the central government’s recent tax exemption announcement for Jammu and Kashmir ‘discriminatory as is going to benefit only handful of industrial units in the state’, the Federation of Chambers of Industries Kashmir (FCIK) today expressed surprise over the statements of Chief Minister Mehbooba Mufti and her three cabinet colleagues welcoming the decision.

FCIK also sought J&K Government’s clarification on how the centre’s is going to boost and promote the industrial development in the state.

On August 16, the Union Finance Minister Arun Jaitley announced the extension in tax exemption for industries in J&K and other hilly states till March 2027, after the decision was approved by the Union Cabinet which in New Delhi under the chairmanship of Prime Minister Narendra Modi. J&K Chief Minister Mehbooba Mufti, Deputy CM, Finance Minister and Industries Minister had welcomed the centre move and said the decision would boost J&K industries.

“The decision taken by the centre was discriminatory in nature that would benefit less than 300 units in the state accounting for under 0.1% of the total industrial units in the state, as that the scheme has been devised only for those units which were availing benefit of central excise exemption prior to coming into GST regime,” a spokesperson of the FCIK said in a written statement.

“FCIK seeks clarification from the chief minister and several other ministers on how extension of tax exemption by the central government to a handful of industrial units in the state could boost   the overall industrial promotion and development in the state.”

The spokesperson said, in a meeting held under the chairmanship of FCIK President Mukhtar Yousuf, the members expressed their surprise over the statements made by the Chief Minister, Deputy Chief Minister, Industries Minister and the Finance minister and ‘their claim that the decision of the central cabinet would go a long way in promoting industrial growth and economic development of the state’.

They spokesperson said that the refund under the new scheme would be available to the identified units for a period of 10 years from commencement of their production or up to 2027 whichever is earlier. The identified beneficiary units in J&K are in production for several years and as such they will be entitled for the benefit only for few more years.

The FCIK members appealed the state chief minister to get such schemes analysed by independent authorities before going public in hailing the same. They said that the said scheme would benefit identified  4284 industrial units across 11 states of India that also include less than 300 units in J&K state. “Most of the units coming under this scheme in the state are non state subject investors who have established their units mostly in Samba, Kuthua and Jammu districts,” the spokesperson said, adding “the scheme is discriminatory in nature and breeds inequality of opportunities.”

FCIK President Mukhtar Yousuf said that industrial units in J&K whose turnover exceeded 1.5 Crores were exempted from excise duty under the previous regime. However under the GST regime this exemption threshold has been reduced to only Rs 20 lakh. All industrial units whose turnover exceeds Rs 20 lakh have been brought into the GST tax net which includes CGST that has mainly replaced central excise among some other taxes.

“No refund of CGST has been announced by the central government to the units brought under tax net outside exemption threshold. As such any joy expressed on the decision is equivalent to rubbing salt on the wounds of affected industrialists,” Mukhtar said.

He said that it would be very difficult for industrial units particularly in small scale sector to survive under stiff competition with their counterparts in other states and the only way to save them is to roll back GST in its present form and have state's own mechanism for taxation. He reiterated  FCIK support to JKCC for demanding roll back of GST in the state which is the only way to save industrial units from a definite collapse.