NEW DELHI, Jan 18 � Ministry of Development of North Eastern Region (DoNER) has advocated the need to develop the region as a Special Export Zone (SEZ).
As part of the ongoing pre-Budget exercise, the Ministry has submitted a list of recommendations to the Ministry of Finance on changes in tax policy both indirect and direct taxes for inclusion in the regular Budget for 2011-12, sources in the Ministry said.
The Ministry has underlined the need for a favourable industrial climate in the Region pointing to the Region�s vast international border, one of the main criteria for developing export oriented industries, sources said.
The Ministry has supported the demand for exemption from the levy of Service Tax to the eligible units of the NER in line with the norms of the SEZs. DoNER has suggested a series of measures to augment the provisions under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007.
DoNER�s recommendations were firmed up in consultations with different business bodies like Indian Chambers of Commerce and other Associations of Industry and Commerce of the North Eastern Region initiated by Minister for Mines and DoNER, Bijoy Krishna Handique.
Sources said the amendments made by the Ministry of Finance and Department of Industrial Policy and Promotion (DIPP) diluting the provisions relating to Central Excise Duty in context of the North-eastern states was also taken up.
The Ministry has requested the Ministry of Finance for Restoration of Curtailment of Excise Duty Exemption on finished products made in the North Eastern Region , with proper safeguards to ensure a strict assessment of cash duties paid towards restoring the pre-March,2008 position.
Alternatively, it was also suggested that the issue might be looked at liberally in order to boost investment in the region and that the general percentage may be hiked from 36 per cent to a much higher one.
For direct taxes, the industry associations of the region have requested continuation of 100 per cent Income Tax exemption as provided by NEIPP 2007, exclusion of NER from provisions of Section 115 JB relating to Minimum Alternate Tax (MAT) and for the incentives-subsidies to be exempted from Income Tax Net. �Ministry of Finance has been asked to take a serious view on these,� sources said.
According to the earlier provision, a manufacturer was entitled to a 100 per cent excise duty exemption on goods manufactured in the region. However, after the amendments, with effect from April 1, 2008 the manufacturer is stipulated to get the refund of only duty paid on value addition in the place of unlimited refund of duty paid in cash.
About Power Generating Units based on both conventional and non-conventional sources, Ministry of DoNER has requested for enhancing the limit up to 200 MW in place of 10 MW for a unit to be eligible for availing the Capital Investment Subsidy, Interest Subsidy and Insurance Subsidy. The Ministry has already furnished detailed comments on the Revision of Transport Subsidy Scheme (1971) of the DIPP.
Ministry of DoNER has also recommended for widening the scope of NEIIPP 2007, so as to cover emerging sectors like higher education (technical, management, health) in the private sector as well as in the PPP mode, sources said.
