In case of open tenders of government departments and government controlled agencies, local micro and small enterprises (MSEs) as well as khadi and village industries units, including coir, handloom and handicrafts will now be entitled to price preference of 10 per cent vis-a-vis local medium and large industries as well as outside industries.
MSEs having ISO (International Organisation for Standardisation) or ISI (Indian Standard Institute) certification for their products will get an additional price preference of three per cent as required under the provisions of Industrial Policy Resolution-2007.
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However, for participation, all the participants in the tender must be registered under Odisha VAT (Value Added Tax) Act or Central Sales Tax (CST) Act.
Similarly, for preparation of comparative price statements for finalising the tender, the VAT payable in the state will be excluded and the price comparison will be made only on the basic price and any tax payable outside Odisha will be added to the basic price for such comparisons.
"In comparing the cost of an article, if purchased from within the state with the price of similar article, if purchased from outside the state, the amount of Odisha sales tax (now VAT) should be deducted from the total cost price since it accrues back as revenue to the state," a notification from the state finance department stipulates.
According to the notification, the purchase of goods outside of the state by government departments is no longer economical if such goods are available inside the state.
The notification also said that the purchase of goods from outside of the state erodes the state's consumption base.
It may be noted that government departments were earlier entitled to avail concessional rate of CST in case of inter-state purchase of goods by furnishing Form-D under CST Act but the said form has been withdrawn by the Taxation Laws (Amendment) Act-2007.
The instructions laid down in the notification will be applicable to statutory bodies, state public sector undertakings and autonomous institutions under the administrative control of the state government.
Welcoming the steps of the state government, Ramesh Mohapatra, president, Utkal Chamber of Commerce and Industry (UCCI) said, "It is a long-standing demand by the chamber which has been duly recognised by the government and it will greatly help the local micro and small units in pharmaceuticals, power cable and power equipment manufacturing sectors."
The industry bodies, at different forums, have been complaining that various government departments are not implementing the provisions of the IPR on the pretext that notifications have not been issued.