Boost for industrial sector as Centre agrees to bear excise duty partially
In a move to “check the flight of industries” from Uttarakhand, the BJP-led Centre and the state government have mutually agreed to bear the cost of 100% excise duty exemption for industrial investors in the region.dehradun Updated: Apr 01, 2017 20:40 IST
DEHRADUN: In a move to “check the flight of industries” from Uttarakhand, the BJP-led Centre and the state government have mutually agreed to bear the cost of 100% excise duty exemption for industrial investors in the region.
“The Centre has agreed to share a major part (58%) of the excise duty and the rest will be borne by us. The move would help attract capital investment and boost the states’ dwindling industrial sector,” state finance minister Prakash Pant said, adding that the investors will have to pay the fee initially but the entire amount will be reimbursed.
The understanding was reached between the two sides at the 13th meeting of the Goods &Services Tax (GST) Council, presided over by Union finance minister Arun Jaitley, in Delhi on Friday. “Once the GST Bill is passed in Parliament, it (understanding) would enable the industrial investors to avail of excise duty exemption, which would further boost the industrial sector in the state,” Pant, who represented Uttarakhand in the GST Council meeting, clarified.
The GST Bill has long been passed by the Lok Sabha. The Centre hopes that the proposed law is likely to get a smooth passage in the Rajya Sabha as well.
Pant said the Centre agreed to share 58% of the cost of the excise duty exemption when he mentioned about the state government’s inability to bear the full price.
According to the minister, industrial investors are entitled to excise duty exemption and other tax holiday benefits, as per the concessional industrial package announced by the erstwhile Vajpayee government for the state in 2003 for 10 years . Later, the package was cancelled mid way by the UPA government at the Centre. “In the fiscal 2015-16 alone, the industrial investors got the excise exemption to the tune of Rs 11,000 crore,” Pant said suggesting that the then government lacked sufficient funds to bear the cost of the excise exemption, which resulted in the flight of industries from the state causing an industrial downturn.
“In the seven years (since 2003 when the concessional industrial package was announced by the Centre) the state had witnessed a tremendous growth both in terms of GDP and per capita income. The scenario is likely to look up again following the understanding reached between them (Centre) and us,” Pant said adding that it (understanding) would also help attract industrial investment for the state’s 10 hill districts.
“Plans are underway to set up eco-friendly industries in the hills. The industries would be information technology or agro-based,” he added.