DONER recommends change in tax policy for NE


Posted on by iSikkim | Category: Business & Economy Current Affairs Slider Post | 214 views | 1 Comment

New Delhi: Jan. 18, 2011

The Ministry of Development of North Eastern Region has submitted a list of recommendations to the Ministry of Finance on changes in tax policy (indirect and direct taxes) for inclusion in the regular Budget for 2011-12, to give a boost to the industrial environment in the Region. The need to develop the Region as a Special Export Zone, among others, has been stressed. NER has a vast international border and the requirement to develop export oriented industries has been highlighted. In line with the norms of the SEZs, the eligible units of the NER should be exempted from the levy of Service Tax.

The recommendations include a series of measures to augment the provisions under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, based on consultations initiated by B.K Handique, Minister for Mines and DoNER, with different business bodies like Indian Chambers of Commerce and other Associations of Industry and Commerce of the North Eastern Region.

The amendments made by the Ministry of Finance and Department of Industrial Policy and Promotion (DIPP) dilutes the provision related to Central Excise Duty in context of the North Eastern states. As per the earlier provision, a manufacturer was entitled to a 100 % excise duty exemption on goods manufactured in the region. However, after the amendments, with effect from 1st April, 2008 the manufacturer is stipulated to get the refund of only duty paid on value addition in the place of unlimited refund of duty paid in cash. The Ministry of DoNER has requested the Ministry of Finance for Restoration of Curtailment of Excise Duty Exemption on finished products made in the North Eastern Region , with proper safeguards to ensure a strict assessment of cash duties paid towards restoring the pre March,2008 position. Alternatively, Ministry of DoNER has also suggested that this issue may be looked at liberally in order to boost investment in the Region and that the general percentage may be hiked from 36 % to a much higher one. For direct taxes, the industry associations of the Region have requested continuation of 100% Income Tax Exemption as provided by NEIPP 2007, exclusion of NER from provisions of Section 115 JB relating to Minimum alternate Tax (MAT) and for the incentives/subsidies to be exempted from Income Tax Net. Ministry of Finance has been asked to take a serious view on these.

In the case of Power Generating Units based on both conventional and non-conventional sources enhancement of the limit upto 200 MW in place of 100 MW for a unit to be eligible for availing the Capital Investment Subsidy, Interest Subsidy and Insurance Subsidy has been recommended. The Ministry has already furnished detailed comments on the Revision of Transport Subsidy Scheme (1971) of the DIPP.

Ministry of DoNER has also recommended for widening the scope of NEIIPP 2007 so as to cover emerging sectors like higher education (technical/management/health) in the private sector as well as in the PPP mode.

 

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