The manufacturing sector in Tamil Nadu has got a Rs 650-crore boost with the State Government announcing critical commercial tax concessions.
Presenting the Budget for 2015-16, Chief Minister O Panneerselvam said in the Assembly that despite the slow growth in the State’s own tax revenue and increased financial burden due to subsidies and allocation to the social sector, the Government is committed to supporting the manufacturing sector. It has also not imposed any new taxes.
The Government will withdraw electricity tax on power generating plants using biomass, to support clean energy. But this concession has not been provided to units using bagasse.
To make industries in the state competitive as compared with those in the neighbouring states, the 3 per cent Input Tax Credit reversal will be withdrawn. This was imposed on November 11, 2013, under Section 19(2) (V) of the Tamil Nadu Value Added Tax Act 2006.
Dealers will also be able to claim input tax credit on inter-state sale of goods without C Form with Clause C under Section 19(5) of the TN VAT Act withdrawn. This will do away with the hassles associated with the inter-State sale of goods without `C` forms.
VAT on LED lamps, cell-phones, air compressors, pump-sets of up to 10HP and their parts has been reduced to 5 per cent from the present 14.5 per cent.
The government has also exempted a range of fishing accessories such as ropes, floats, twine, lamps and swivels from VAT.