| ICMF warned the incentives would break the Cenvat chain and also upset the working of presently healthy units at other locations. |
| ICMF felt location specific exemptions would create road blocks for introduction of value added tax. Tax rates in all states need to be made uniform. |
| Cotton was outside central excise duty being an agricultural commodity. Textile units manufacturing cotton yarn or cotton textile in a composite textile mill, or garments in integrated textile operations at specified locations would have its entire production of yarn, fabric and garment outside the duty net. |
| In a letter addressed to the finance minister, the textile minister and the commerce minister, B K Krishnaraj Vanavarayar, chairman of ICMF, said, "Companies setting up units in specified locations are mostly driven by the concessions rather than hardcore economic rationality or commercial viability." |
| He added, "Empirical evidence has proved industrial units that have sprung up taking advantage of fiscal aid cannot become viable under the highly competitive environment. These units become sick once the relaxations are withdrawn or after the expiry of the time limit for the rax exemption leading to loss of employment and locking up of capital assets." |
Explore Business Standard