PHD chamber welcomes reduced VAT by Punjab govt
PHD Chamber of Commerce and Industry welcomed the decision of the Punjab government to reduce the value-added tax (VAT), a long-standing demand of the basic steel manufacturers.chandigarh Updated: Dec 27, 2013 19:34 IST
PHD Chamber of Commerce and Industry welcomed the decision of the Punjab government to reduce the value-added tax (VAT), a long-standing demand of the basic steel manufacturers.
RS Sachdeva, co-chairman of Punjab Committee of Chamber said,“It is a positive step for the survival of the steel industry in Punjab, the biggest market in India consisting furnace, iron, steel-rolling mills, re-rolling mills and pipe makers.”
He added: “As the VAT will be reduced to 2.5% from 4.95%, around 700 small and medium steel mills in Mandi Gobindgarh and Ludhiana are likely to benefit from it. This will help the state iron and steel industries reeling under several disadvantages right from far-off ports to expensive power and shortage of land.”
Dalip Sharma, director of PHD chamber said such a move would boost up the production of iron and steel in Punjab and the industry would be able to compete with the neighboring states which were enjoying tax benefits.
“It will also lead to elimination of tax evasion, besides increasing production by encouraging flow of scrap and raw material into the state. With reduced tax on import of scrap there will be increased liquidity available with the manufacturer which is important for the viability of the unit,” added Sachdeva.
On the other hand, the proposal of the Punjab State Power Corporation Limited (PSPCL) to hike the power tariff in the state by 13% equivalent to 75 paise per unit in its annual revenue requirement (ARR) submitted to the Punjab State Electricity Regulatory Commission (PSERC) for the 2014-15 financial year is demoralising for the industry.
“Many power intensive units have already started closing down due to higher power tariff and any such proposal to hike the tariff should be withdrawn. No hike should be demanded from the consumers who are on high power feeders like 66 KV and 132 KV. Chamber suggests that cross subsidy on power should be reduced and relief be given to the industry in the tariff order proposed for next year,” Sachdeva added.