Industrial production for the current financial year in Kashmir will be 50 percent down due to discontinuation of special tax exemptions post GST implementation, apex industry body Federation Chamber of Industries Kashmir (FCIK) said on Friday.
Speaking with Kashmir Post, FCIK President Mukhtair Yousuf said despite playing an important role for import substitution, local industry has not been provided incentives such as “extension of tax holiday’ as promised by the state government.
“Most of these units have been set up on the promises and commitments made by the consecutive governments under various industrial policies and resolutions. The extension of tax holiday was promised in order to equalize the excess cost of production which they ought to incur because of geographical conditions, infrastructural deficiencies and inconducive environment but it has not been fulfilled,” Yousuf said. “The tax exemptions to industry was discontinued on July 8 after extension of central GST law despite genuine opposition from general public as well as trade organisations but government went ahead with its plans,” Yousuf added.
According to Yousuf, state government has made “repeated promises” before and after implementation of GST law that industry in the state shall continue to enjoy 100 percent tax exemptions as enjoyed by them in the previous regime.
“Instead of extending any helping hand, the Finance Department has been involved only in media hypes which have adversely affected the morale of hapless entrepreneurs already stressed and overburdened with huge debt besides having lost their own capital,” Yousuf said.
Yousuf said a total of 53544 units are registered under MSME and large enterprises with Directorates of Industries and Commerce Jammu and Kashmir which are providing direct employment to around 4 lakh persons.
While highlighting the recently issued SROs 519 and 521, under which state government has provided CGST tax refunds to a “certain section of the industry”, Yousuf said bulk of local units has been ignored while incentivizing industry. CGST is the centre government’s share of the tax under the new Good and Services regime implemented across India in July last year.
“Providing 42 percent CGST refund from the state government to “selected outside investors” based in Jammu region is a burden on the state exchequer. Only 317 units out of a total 60,000 units in the state have been notified for the 42 percent CGST refund from state government while 58 percent refund to them is given by central government,” Yousuf said. He said SRO 519 and 521 shows “indifferent attitude” of authorities towards the local industry which survives despite logistical and other constraints. “We are not averse to refund for any industrial units but somewhere a “deal has been struck” which made government pass the SROs in such a hurry while ignoring majority of local industry,” Yousuf said.
Police recently detained scores of industrial unit holders protesting against SRO 519 and SRO 521 in the summer capital. Unit holders who had gathered at Press Colony here said the “discriminatory SROs” were issued in a hurry to benefit “handful of outside investors” based in Jammu region.
Kashmir to face 50% cut in industrial production post GST
