Centre withdraws excise exemptions to HP

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Shimla, Jan 21 (UNI) The Centre has amended the area-based excise exemption benefit to Himachal Pradesh and Uttaranchal by partially withdrawing these exemptions for peripheral industrial activities, official sources today said.

"In order to ensure genuine industrial activities in these regions, it has been decided that benefits of duty exemption would not be extended to goods in respect of which only peripheral activities like preservation during storage, cleaning operations, packing, re-packing, labelling or re-labelling, sorting and alteration of retail sale price, etc take place," the sources told UNI here.

Excise and income tax exemptions were granted to Himachal and Uttaranchal besides special category states in the north east and Jammu and Kashmir in 2003 by the then NDA Government to promote industrial activities.

The sources said the order, which came into effect from Friday, was applicable to all existing, upcoming or proposed units involved in such operations.

The exemptions were intended to encourage industrial development by creation of basic infrastructural facilities and to generate employment opportunities for the local people, they said.

The sources said the new excise regime would ensure that the intended purpose of promoting substantial industrial manufacturing activities through grant of fiscal incentives was fully met.

However, the move has generated skepticism here with a senior industrial department official saying that it would hit many industries, especially in the pharmaceutical sector.

The official, requesting anonymity, said it was likely to stall the industrialisation process as a whole in the state due to the Centre's decision.


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