Govt may reject investors’ demand over VAT refunds
The state government is unlikely to meet the prospective investors’ demand for re-structuring the incentive period for getting value added tax (VAT) refunded.mumbai Updated: Jun 25, 2013 10:19 IST
The state government is unlikely to meet the prospective investors’ demand for re-structuring the incentive period for getting value added tax (VAT) refunded.
In the view of inflation, many interested investors have asked the state to refund them the entire VAT in first five years although the state policy allows a 15-year period for such incentive.
They also want the state to continue refunding VAT even in the remaining period of 10 years, which the state’s policy-making high-power committee does not approve of.
Principal secretary (industry) Apoorva Chandra confirmed the development but refused to reveal the state’s stand.
“We have received such demands from investors who are Tax concessions: Other than a system in place to refund value added tax (VAT) in a time-bound manner, the investors get a rebate of 10% or Re 1/unit power bills in Vidarbha and Marathwada regions for the first three years. concerned about ongoing inflation. But we are not very positive on accepting it.”
A senior industry department official said the investors were mainly in ultra mega projects category which demands a minimum investment of Rs 1,500 crore and assures 3,000 jobs.
“Most such projects are in automobile sector which are already upset over the state’s refusal for refunding VAT to their proxy companies,” said the officer. He said in addition to prospective investors, the existing investors too were demanding extra financial sops for their operational projects.
The finance department is opposed to the demand because if approved, it would deny the state exchequer significant revenue. The new industry announced early this year focuses more on small and medium enterprises (SMEs) as they create more jobs though they do not contribute much to the state revenue.