Govt. urged to withdraw tax on captive power

Bangalore Oct. 10. Trade and industry associations in the State are agitated over the decision of the Government to levy a tax of 50 paise per unit on captive power generation. The Federation of Karnataka Chambers of Commerce and Industry (FKCCI), the Greater Mysore Chamber of Industry (GMCI), and the Karnataka Small-scale Industries Association (KASSIA) have urged the Government to withdraw the same.

The KASSIA president, C.R. Janardhana, in a statement said the levy would be a severe blow to the small-industry sector which was already affected due to competition and demand for cost reduction. Many small-scale units had equipped themselves with generators as a stand-by arrangement in view of the irregular supply of power.

Mr. Janardhana said that over 50 per cent of the SSIs in the State had closed down due to various reasons. The tax would add to the woes of the industries.

The FKCCI president, B.S. Arun Kumar, said the government decision had come as a shock to the industry, which was already burdened with various levies. Industries had no alternative but to resort to captive power generation in the absence of assured grid supply.

"First, the Government forces industry to set up captive generation, incurring huge expenditure, because of its inability to supply grid power. Then it hits upon this absurd idea of levying a tax on all such power to ensure power supply to rural areas. It is as though the Government is not satisfied with the cross-subsidies that industry has already been forced to bear on whatever power is consumed by them from the grid."

The GMCI members told presspersons here on Friday that though the tax was to be collected for nine months, the period could be extended.

The GMCI president, Indra Prem Menon, stressed that captive power in the State had grown to the present 3,000 MW as successive governments had insisted that "...one-third of our power requirements should be met through self-generation". Besides, the 50 paise tax would be the highest in the country as neighbouring Tamil Nadu charged only 10 paise per unit.

Meeting sought

The Karnataka Small-scale Industries Association (KASSIA) has, meanwhile, urged the Government to convene a round-table conference chaired by the Chief Minister, S.M. Krishna, to discuss and issue on-the-spot orders for solving the various problems of small-scale industries in the State..