Chief Minister Jayalalithaa on Friday announced concessions, including exemption from Value Added Tax (VAT) on furnace oil used in generator sets, to provide relief to small and medium-scale industries struggling for survival due to acute power shortage.
The concessions were made after a delegation of representatives of small industries associations of Coimbatore district, textile associations and paper manufacturers called on her at the Secretariat on Friday, seeking sops to bail them out from the power crisis affecting industrial output.
Based on their demands, Ms. Jayalalithaa ordered the reduction of rate of the VAT on generator sets from the present 14.5 per cent to five per cent.
The margin money to be paid by entrepreneurs on loans obtained from the Tamil Nadu Industrial Investment Corporation (TIIC) for purchasing generator sets had been reduced from 20 per cent to 10.
She also extended the VAT exemption provided to furnace oil used in gen-sets till May 2013 with retrospective effect from October 1, 2012. Already, the government had waived VAT from February 1, 2012 to September 30. This would result in Rs. 97 crore loss to the government exchequer, she said, adding that the sops to help industrialists generate additional power would lead to better production and more employment.
Special Correspondent from Coimbatore adds:
Welcoming the Chief Minister’s announcement, the Southern India Mills’ Association (SIMA) said the measures would help small and medium-scale textile mills and powerloom units to generate captive power and minimise the losses.
In a release, S. Dinakaran, SIMA chairman, also stated that the association had sought two year VAT holiday on cotton cone yarn and high speed oil for captive power generation.