GST regime: Tax holiday to hilly states will ruin us, say Ludhiana industrialists
The extension of tax exemption to hilly states under the Goods and Services Tax (GST) regime by the Centre has caused discontent among Ludhiana-based industrialists, who feel that their interests will now be badly hit.
Many industrial associations believe that the GST exemption to hilly states till 2027 will ruin the industry in Punjab.
Ranjodh Singh, vice-president, Federation of Auto Parts Manufacturers Association said the tax holiday in hilly states was to end in 2018 and that could have given a boost to the industry in Punjab. “But the exemption of GST to these states till 2027 will adversely impact the Punjab industry.”
He added, “Some areas of Punjab could also have been provided tax holiday, thus providing a much-needed support to units here.” The hosiery industry here also believes that the Centre has taken away the level playing field from it.
‘Will lead to migration of Punjab Industry’
Vinod Thapar, chairman of Knitwear Club, said Punjab’s knitwear industry should also be given tax exemption.
“A level playing field has been denied to the industry in Punjab, which is ailing and could now migrate to hilly states. Although these states were already enjoying tax exemption, the tax holiday under the GST regime will give the local industry a reason to move there,” he said. Badish Jindal, president, Federation of Punjab Small Scale Industries Associations, said that if the Centre wants GST to be regime successful, it should give tax exemption to sick industries.
“While other states will have to give hefty GST on different industries, the hilly states will pay no taxes. This would result in further migration of industries from Punjab,” he said. Sudershan Jain, president, Knitwear and Apparel Manufacturers Association, said they have to pay 12% tax on woollens under GST and 5% on cotton goods. “Tax holiday given to the industry in hilly states will not provide a major benefit to the textile industry. The textile and hosiery industry is largely based in Ludhiana.”