GST may trigger de-industrialization in Uttarakhand, Himachal
Updated: Mar 06, 2015 03:10:57pm
New Delhi, March 6 (KNN) With GST rollout date 1st April 2016 coming nearer, many companies that set up shops to avail tax benefits of excise and income tax in special category states like Uttarakhand and Himachal may soon be heading their home states.
A large number of companies from states like Gujarat, Maharashtra and Delhi started investing in Uttarakhand and Himachal from 2002 onwards to take advantage of tax concessions which included 100 per cent excise duty exemption for a period of ten years and 100 per cent income tax exemption for an initial period of five years and thereafter 30 per cent for companies for a further period of five years. Also on offer was a capital investment subsidy of 15 per cent on plant and machinery subject to a ceiling of Rs 30 lakhs, applicable also to existing units.
The excise duty break is set to expire in 2020 with GST roll out clearly in sight it has been amply clear that these duty exemptions are definitely not to be extended further due to operational difficulties of having areas based exemptions and unified GST.
According to Federation of Indian Micro and Small Medium Enterprises (FISME) while MSMEs set up around mother units in these states as in Auto sector may continue, stand alone MSMEs in sectors such as Phrama and Food processing have started preparing for journey back home.
Unfortunately, many of the units who came in from advanced states like Gujarat, Maharashtra and Delhi face huge governance and infrastructural issues in Uttarakhand.
“The National highway between Delhi and Uttarakhand is a joke and it is such a pain to move goods to and fro”, says an MSME owner on condition of anonymity.
“Faced with perpetual problems of corruption, power shortages and infrastructure, many pharma companies from Gujarat are returning”, he added. (KNN/AB)
A large number of companies from states like Gujarat, Maharashtra and Delhi started investing in Uttarakhand and Himachal from 2002 onwards to take advantage of tax concessions which included 100 per cent excise duty exemption for a period of ten years and 100 per cent income tax exemption for an initial period of five years and thereafter 30 per cent for companies for a further period of five years. Also on offer was a capital investment subsidy of 15 per cent on plant and machinery subject to a ceiling of Rs 30 lakhs, applicable also to existing units.
The excise duty break is set to expire in 2020 with GST roll out clearly in sight it has been amply clear that these duty exemptions are definitely not to be extended further due to operational difficulties of having areas based exemptions and unified GST.
According to Federation of Indian Micro and Small Medium Enterprises (FISME) while MSMEs set up around mother units in these states as in Auto sector may continue, stand alone MSMEs in sectors such as Phrama and Food processing have started preparing for journey back home.
Unfortunately, many of the units who came in from advanced states like Gujarat, Maharashtra and Delhi face huge governance and infrastructural issues in Uttarakhand.
“The National highway between Delhi and Uttarakhand is a joke and it is such a pain to move goods to and fro”, says an MSME owner on condition of anonymity.
“Faced with perpetual problems of corruption, power shortages and infrastructure, many pharma companies from Gujarat are returning”, he added. (KNN/AB)
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