Association of Industries appeals to Hon’ble Lt. Governor for enhanced budget to meet actual claims for Turnover Incentive

03-05-2023: Association of Industries (Regd.) Gangyal is worried about the virtual denial of the announced, declared, and much-publicized Turnover Incentive for the existing industry. Govt. has provisioned an amount of Rs. 50 crores for turnover incentive while the claims to the tune of more than Rs. 200 crores have been filed, Sh. Rajesh Jain, President of the Association of Industries, Gangyal appeals to the Hon’ble Lt. Governor Sh. Manoj Sinha to enhance the budget for the Turnover Incentive to the tune of actual claims filed by the existing industries. Association of Industries, Gangyal has time and again requested the higher officers regarding the subject but nothing has been done in the matter.

It is pertinent to mention here that prior to the introduction of GST, the Govt. afforded a number of incentives to keep existing industries competitive as well as helped their survival. These incentives are in the shape of full VAT remission and also an exemption of Toll Tax i.e. Rs. 1000/- per PMT on the import of raw material and export of finished goods also exempt.

With the advent of GST in the year 2017 and the later abolition of Toll Tax and the existing industry came under immense stress for its survival as it had lost its competitive edge over industry and traders from outside the state.

 The existing units who were availing 100% exemption of State Share of Taxes by way of VAT remission, the Govt. notified vide SRO 63 of 2018 dated: 05.02.2018, reimbursement of SGST paid in cash. Also vide SRO 431 of 2018 dated: 25.09.2018, 2% reimbursement of CGST paid on interstate sale of goods.

 These incentives were very meager compared to the incentives prior to the introduction of GST and the abolition of the Toll Tax. The industry made various submissions and representations but for the existing industry to survive additional incentive needs to be given in the shape of a 5% turnover incentive to the existing industry. After due deliberation the Govt. was kind enough to introduce and notify a scheme vide Govt. Order No. 127-IND of 2021 dated: 21.05.2021 allows 2%/ 3%turnover incentive for the existing industry w.e.f.  financial year 2021-22. This incentive was with the conditionality that the maximum turnover of the financial year 2017-18, 2018-19, and  2019-20 and also SRO 431 of 2018 was quashed and assumed to be clubbed with turnover incentive.

 Further, the incentive was capped at Rs. 50 lacs per year for each eligible unit and will be made available for 5 years starting from the financial year 2021-22.

 At the time of the announcement of the incentive, the Govt. made an initial provision of Rs. 50 crores only in the budget. The then Principal Secretary to Govt. had assured that as and when

the actual figure became known additional funds would be made available to meet the actual quantum of incentive.

 The eligible existing units are stressed for liquidity and eagerly awaiting disbursement for this incentive. The 2% / 3% turnover incentive requires limited money from the Govt. to keep the existing industry functional and competitive. 

 We may mention here that the Govt. has recently introduced an attractive incentive scheme for setting up a new industry in the UT wherein reimbursement of nearly 400% of capital invested in Plant & Machinery is reimbursed over a 10 years period. This incentive will entail a substantial quantum of funds as No. of industries have shown their willingness to set up capital incentive industries. 

Non-disbursement/delayed disbursement of already notified incentives sends a wrong signal to the potential new industrial units waiting to set up their industries in the J&K UT and also disheartens the existing industry. 

We would honestly urge the Govt. to kindly provide the necessary funds and issue instructions for the timely disbursement of the 2% / 3% turnover incentive.