Mayawati govt. scraps tax concession to industrialists in UP
Lucknow, July 29 (UNI) Continuing its tirade against the decisions of the previous Mulayam Singh Yadav government, Uttar Pradesh government today scrapped the policy extending tax concessions to the industrialists investing Rs 100 crore or more.
The decision to scrap the policy of 2006 was taken in the state cabinet meeting chaired by chief minister Mayawati here.
The policy was announced by the previous Mulayam Singh Yadav government in May 2006, aimed at arresting the flight of capital to Uttarakhand provided for capital subsidy at the rate of five per cent for all investment unto Rs 100 crore and above. The other facilities included transport subsidy and interest free loan.
State cabinet secretary Shashank Shekhar Singh said that the entrepreneurs who were issued letter of comfort under the scheme will not be covered by the government's decision.
He said that under this scheme letter of comfort was issued to only one entrepreneur and hence the government's decision will have no greater impact.
Mr Singh said the policy was not ethical as most of the tax relief should have been given by the centre besides the tax concessions admissible to Uttarakhand under the special status was ending on March 2009.
The previous Samajwadi Party government, for attracting investment in the state, in the wake of special status given to the hill state, had formulated a special package of incentives for the investors in the state. The package announced in May 2006, was made available for those units which commenced commercial production within 36 months of enforcement of the package. The package offering concessions did not included the units to be set up in Noida and Greater Noida.
The package provided for concession up to double of the investment or 200 per cent of the Rs 100 crore invested. This concession was to be provided in the form of trade tax where the tax amount was to be treated as interest free loan for a period of 15 years. The loan would be repayable in next seven years. The package also provides for 5 per cent capital subsidy on the investment of Rs 100 crore and 20 per cent on investment of Rs 200 crore and above.
As per the package new units were to be exempted from paying the cost of land acquisition, over head charges, lease rent. If the unit is being set up in an underdeveloped area and the investor incurs expenditure on infrastructure facilities, then the unit will be exempted from paying maintenance charges, peripheral development and external development charges. The package also provided for transport subsidy to the new units on the import of goods from out side the state except on the import of coal and gas.
The UP government while defending the package in 2006 had stated that there was no alternative but to devise its own package of incentives as a unit of LG and Tata Motors have already gone to the hill state besides many Vanaspati food processing and IT units.
The UP government had demanded similar package from the UPA government, but as the Centre ignored the repeated pleas of UP, the state government formulated its own package of incentives and tax concessions for the investors, for arresting the flight of capital to Uttarakhand.
UNI