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Punjab to now take Centre to apex
court on tax waiver
WSN Network
CHANDIGARH:
For
years, Punjab has been crying hoarse that its industry is suffering
and migrating to neighbouring states because of skewed tax rebates
by the Centre. Also, investors were preferring to take their
ventures elsewhere. Now, finally the state government has decided to
move the Supreme Court seeking a compensation of over Rs 10,000
crore and quashing of all tax benefits given to the hill states of
Himachal Pradesh, Uttarakhand and Jammu and Kashmir.
CM Prakash Singh
Badal cleared the decision to file two appeals in the apex court one
to seek damages and the other to seek annulment of the tax holiday
granted to Himachal, Uttarakhand and Jammu and Kashmir.
Senior Supreme
Court advocate K.K. Venugopal was to be engaged to plead the Punjab
government petitions, in which it has detailed how the state
suffered severe loss and its industry could not grow at the pace it
should have and increase employment opportunities for its people.
Punjab held
these sops responsible for a steep decline in the industrial growth
rate in Punjab, which had almost killed the industrial sector. The
sops were given during the NDA regime but the Badalled Akali Dal
only made ritual noises at that time. Now the SAD-BJP regime has
deduced that the sops are unconstitutional and violate Article 303
of the Constitution.
In the northern
region, the three hill states have benefited from the tax
concessions, while Haryana could prosper because of its geographical
advantage - being located close to the Capital New Delhi. Punjab's
neighbour has seen the most explosive growth of Gurgaon as a major
industrial and services hub, with a sizeable BPO industry taking
root. Besides, the booming housing and real estate sector in Gurgaon
has also made the Haryana exchequer richer by thousands of crores of
rupees.
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Assembly had
earlier passed resolution
On April 1,
2003, the Punjab Assembly had passed a resolution saying: "This
house views with concern the impact of the specialpackage of
incentives granted by the Government of India in the
form of excise waiver and income tax holiday to the neighbouring
states on the existing industrial units and the new industrial
investment… and unanimously resolves to urge upon the Government
of India to provide the same special package of incentives to
the industrial units in the state of Punjab that has been
provided to the states of Uttarakhand and Himachal Pradesh" |
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As Punjab also
has the disadvantage of being situated far from any seaport or
sources of raw materials like iron and steel, it came as a major
setback when the Vajpayee government granted a huge "tax holiday" to
encourage industrial investment in the hill states, said the
officials.
The concessions
granted to the three states in January 2003 by the NDA government
included 100 per cent outright excise duty exemption for 10 years,
100 per cent income tax exemption, and capital investment subsidy at
15 per cent of investment in plant and machinery, subject to a
ceiling of Rs 30 lakh.
Both the
Congress and the SAD-BJP regime have been condemning the move,
saying it had not only led to the flight of capital but created
huge economic disparity within the region at the cost of Punjab.
As per an
estimate, the growth rate of industrial production in Punjab fell
from 4.8 per cent in 2002 to 0.82 per cent in 2005. Moreover, the
share of manufacturing sector in the state GDP also fell from 16.22
per cent to 13.68 per cent in the corresponding period. The Central
excise duty decreased from Rs 2,787 crore in 2003-4 to Rs 867 crore
in 2006-7..
23 April 2008
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