Centre’s decision to extend the sunset clause in the neighbouring hill States for another 10 years has apparently thrown a spanner in Punjab Government’s plans to work out the mechanics for revival of industry in the State.
Punjab, who has all along been demanding from the Centre to extend similar tax concessions to the border State too, has once again been ignored.
Even as the State Government claimed that the decision would not affect Punjab, the experts maintained that it would seemingly hamper the Government’s campaign to revive the State’s fading industries.
“We are getting details...The decision is yet to be notified...What we have understood by the Centre’s statement is that it is for the existing units and not the new ones, and thus would not impact Punjab as such,” Chief Minister’s Media Advisor Raveen Thukral told The Pioneer.
Union Cabinet, a day before, has decided to extended till March 31, 2027, the sunset clause under the Goods and Service Tax (GST) for the duty exemption scheme for industrial units in the North Eastern States and the Himalayan States of Jammu & Kashmir, Uttarakhand and Himachal Pradesh — a concession that is estimated at Rs 27,413 crore.
The budgetary support will be extended for the industrial units located in these States which availed the benefit of central excise exemption prior to coming into force of GST regime.
As the GST regime permits refund, but no exemption, the “beneficiary” States have been given benefit under the same clause. The central share of Central GST and Integrated GST will be refunded to the affected eligible industrial units.
As per an estimate, as many 4,284 eligible units located in these States will be benefited from the scheme.
The Congress Government is harping on the agenda of revival of industry in Punjab, with Chief Minister Capt Amarinder Singh himself taking over the charge. He has been meeting business magnates, conducting tours to other States, meeting local industrialists to chalk out ways and means to resuscitate State’s industrial sector.
Formulating new industrial policy, freezing power rate at Rs 5 per unit, single window system, are some of the steps the State Government has already initiated in this direction. But, it still remains to be seen how far he will succeed.
At one point of time, Punjab had been the hub of small scale industries. But the industrial units across the State have pulled down the shutters, especially in Mandi Gobindgarh — which was once known as the steel town.
Successive Governments have blamed the capital flight from Punjab to the neighbouring hill States on the tax concessions granted to the industries.
In fact, Capt Amarinder has only recently urged to the Centre to atleast consider extending similar incentives to the State’s border belt and in sub-mountainous area along the hilly tracts. Unfortunately, the same was not at all taken into consideration.
It was the NDA Government regime led by Atal Behari Vajpayee, of which SAD president Sukhbir Badal was also part, which announced these incentives to the hill States. Punjab has been complaining since then.
“On one side, Punjab is facing competition from the hill States which enjoy tax concessions, and on the other, it has Haryana which take benefit of its proximity with Delhi for being a part of national capital region. To top it all, Punjab had also suffered due to adverse law and order scenario, non-conducive VAT system in the pre-GST era and expensive power rates,” said an industrial expert.
SAD MP Harsimrat Badal is Punjab’s face in the Union Cabinet who had feigned ignorance about the decision. SAD, during its 10-year-long tenure, had strongly opposed tax concessions. It is yet to see what stand the party would take.