ST exemption replaced with subsidy
18 July 2001 17:37 IST In view of VAT regime beginning from April next year, Goa has decided to withdraw the sales tax exemption scheme, replacing it with a new subsidy scheme for all the industries availing the facility here.
The scheme, named as the Goa Sales Tax Deferment-cum-Net Present Value Compulsory Payment Scheme, 2001, has been brought into force with immediate effect, after announcing it in the ongoing Assembly session.
Besides income tax holiday, Goa was also granting sales tax exemption for 15 years to the small scale industries and 10 years for the medium and large scale industries.
As the consensus reached at the chief ministers' conference on 16 November to cut down 25 per cent of central assistance to states if such exemptions are now withdrawn before VAT regime begins, Goa has rushed into introducing a new scheme in replacement.
As per the scheme, industries will have to pay 50 per cent sales tax of the total value every month, while considering remaining 50 per cent as subsidy. The argument being used here is that at the rate of 15 per cent compounded interest for five years, the value of 50 per cent amount becomes cent per cent.
However, Goa has set a limit of 31 July for the industries to register themselves. In case of small industries, it would be provisional registration whereas medium and large scale industries will have to apply to the high power co-ordination committee.
While making the scheme optional, the new industries will have to begin production by 31 March next year. In case of old industries availing the ST exemption, the scheme would be made applicable for the balance period.
According to chief minister Manohar Parrikar, he had already announced the scheme for liquor manufacturing units, while presenting the annual budget this year. The same scheme is being now extended to all the industries, to comply with the national consensus to face VAT regime.
