Industries get Rs 7,000 cr tax sops

The government of Gujarat has accorded tax benefits, in the form of sales tax waiver or deferred payment of sales tax, worth Rs 6,997.58 crore in fiscal 2003-04.

As many as 49 big industries located in Gujarat have availed of the benefits in the past fiscal year, it was officially announced in the Budget session of the Gujarat state legislative assembly.

Under the waiver or deferred payment of sales tax scheme of the state government, several units have been granted the waiver or delayed payment of tax for a period of five, seven, nine or 14 years since production commenced at the units. These are also special tax benefits for those units set up in backward areas.

The Gujarat government tabled these figures on the first day of the budget session on Monday, in response to a query raised by Kunwarji Bawaliya, an MLA from Jasdan in Saurashtra.

In reply, the industries department of the state government said tax waiver or delayed payment benefits were accorded to as many as 49 big industries under the scheme of the government.

All state governments announce special tax benefits to industries as per set guidelines. For instance, there are special benefits for companies investing over Rs 1,000 crore, Rs 500 crore or Rs 100 crore.

Then, there are also waivers or benefits if industries are set up in backward areas. Hazira was declared a backward area few years ago, and after the earthquake, Kutch has been declared a backward area.

In the deferred payment of tax scheme, industries are allowed to collect sales tax for a period of five, seven, nine or 14 years, and can make payments only after the stipulated period is over.

By giving such concession, the industries are in a position to use the money for further growth.

However, following the introduction of value added tax, which is yet to be implemented, all state governments have decided to discontinue granting waivers or deferred payment benefits to industries that have been set up after VAT was introduced.

However, those industries which have already been granted the waivers or benefits will continue to enjoy these benefits. This includes those projects in the pipeline, which were granted tax benefits before VAT was introduced.

Based on the size of investment and whether the company has chosen to set up its first unit in Gujarat, the state government accords status such as 'prestigious' and 'pioneer' to units.

Such companies also have been receiving tax waiver or deferred payment benefits according to specified norms.

Top 10 beneficiaries

• GM India, Panchmahals.
• RIL, Jamnagar.
• Arvind Polycoat, Gandhinagar.
• Shri Rama Multi Tech, Mehsana.
• Apco Industries, Gandhinagar.
• Rama Newsprint, Surat.
• Nirma Ltd, Bhavnagar.
• PSL Holdings Ltd, Kutch.
• Essar Steel Ltd, Surat.
• Arvind Mills, Gandhinagar.