Jammu, Aug 28 (KNN) The J&K SMEs are reeling under a crisis and are on the verge of closure as the units are not able to source raw materials as crores of their rupees are blocked with the J&K Small Scale Corporation (J&K SICOP) due to non-implementation of cashless system of VAT for the purchase of raw material through SICOP, said an industry body.

In a meeting, industry body, Bari Brahmana Industries Association (BBIA) has discussed the issue related to the non-implementation of cashless system of vat for the purchase of raw martial through SICOP.

“As per Government Order No.124-Ind of 2014 dated 29-05-2014 and SRO No- 151 dated 29-05-2014 by virtue of which the cashless system of VAT remission to industrial sector was supposed to be introduced with effect from 01/06/2014, but till date it has not been yet introduced by J&KSICOP due to which the industrial units are suffering very badly,” BBIA said in a press release.

The requisite funds as per SRO are not yet allotted to the Commercial Tax Department by the Industries Department due to which the whole procedure has been stopped resulting in blockage of crores of rupees of industrial sector with J&KSICOP, the release added.

“As per the Guidelines issued by the virtue of Government Order, it is clearly mentioned that the Planning Department shall release requisite funds to Industries and Commerce Department in lump sum in the beginning of the Financial Year which shall be credited in advance by the Industries and Commerce Department, through Directorate of Industries and Commerce, Jammu/Kashmir being part of their annual plan.

“But till date no action has been taken for the transfer of funds to industries department resulting into the non-functioning of cashless system because of which the unit holders are not able to source the raw materials, as the old refund mechanism has been replaced by cashless mechanism with effect from 01-06-2014, resulting in slowdown of production activities,” BBIA said.

The industry body said that “in spite of orders issued by the Chief Minister for the implementation of the Cashless System of VAT in the 5th Industrial Advisory Committee Meeting held on 06-08-2014, no action has been taken by the concerned departments which clearly show the negative attitude of the government towards the industrial sector”.

An atmosphere of uncertainty prevails in industrial sector for the blockage of approximately 80 crore of rupees already paid as VAT to J&KSICOP till date but no action has been taken by the government for the refund of VAT/Cashless system resulting in blockage of working capital limits and their banks accounts may be converted into NPA, the release said.

“We fear that the industrial units have no option but to close down their units which will be resulting into the increase in the unemployment graph of J&K State in near future,” it added.

The industry body has sought the Chief Minister’s intervention into the matter for the release of funds on priority basis for the refund of VAT already deposited with the SICOP.

BBIA has also urged the state chief minister to give strict instructions to the concerned departments to introduce the cashless system for VAT refund through SICOP to honour the decision taken in the 5th Industrial Advisory Committee which will provide relief to the industrial units who are paying huge amount as interest to the bank and their working capital, the release said. (KNN/SD)