Excelsior Correspondent
SRINAGAR, Feb 9: The Federation of Chambers of Industries Kashmir (FCIK) today urged the Government to announce long-pending power and VAT amnesties for industrial units during the ongoing budget session, saying the relief is essential for the survival of many struggling enterprises.
A spokesperson from FCIK said many industrial units across Jammu and Kashmir are facing severe financial stress due to the impact of Covid-19, re-organisation, and a slowdown in public procurement after changes in policy in 2019. “A large number of units have landed in severe financial distress or turned sick,” the spokesperson said.
Because of weak business activity, many units are unable to use electricity up to their sanctioned capacity. At the same time, several enterprises have defaulted on payments to the Kashmir Power Distribution Corporation Limited (KPDCL) due to lack of funds. “The electricity bills issued to these units include heavy demand charges and compounded interest, which have made repayment extremely difficult and unviable,” the spokesperson said.
FCIK said that over the past three years, the government announced two amnesty schemes for domestic consumers, giving complete waiver of interest and allowing payment for actual electricity consumption in installments. “On the same analogy, the Government should announce a power amnesty for industrial consumers,” the spokesperson said.
The Federation has demanded waiver of demand charges, waiver of interest and surcharge, billing only for actual electricity consumed, and the option to clear arrears in 12 monthly instalments.
The spokesperson said the matter has been repeatedly taken up with the Chief Minister and the Chief Secretary, who acknowledged the difficulties faced by industry and assured that the issue, would be considered. However, the absence of any announcement in the budget proposals has caused disappointment.
FCIK also raised concern over VAT-related notices being issued to industrial units for the pre-GST period. The Federation said that under the VAT regime, industry in Jammu and Kashmir was exempted from paying tax through a remission mechanism and unit holders did not collect VAT from customers. “At the time of transition from VAT to GST in 2017, the industry was promised a clean slate for the entire VAT regime,” the spokesperson said.
FCIK has sought a non-discretionary VAT amnesty to close all pending VAT cases and withdraw demands.
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