Chandigarh: The Punjab government in its new industrial policy has given fiscal incentives to the first manufacturing unit of different sectors in border districts and has pruned the negative list of industries for such areas to include distilleries for concessions, according to sources and official notification.
In first of its kind, the Detailed Schemes and Operational Guidelines, 2018, for availing fiscal incentives under the Industrial and Business Development Policy provides for fiscal incentives for units set up within 30-km of the international boundary, a move that industry sources said will put other units in the state, particularly distilleries, at a heavy disadvantage.
"No CLU (change of land use charges) will be required for units set up in Border Zone and 100 per cent exemption from External Development Charges (EDC) to these units," the Policy said.
"The first unit which comes into commercial production for each sector of manufacturing and service industry with minimum FCI (fixed capital investment) of Rs 100 crore would be entitled to 40 per cent additional FCI in the maximum limit prescribed for net State-GST (SGST)."
Also, an interest subsidy of 5 per cent per annum on term loans for industries border districts will be given subject to a maximum of Rs 10 lakh per year for three years.
The incentive is, however, available only for the first unit in the each of the sectors and does not include expansion of existing units.
While the policy that seeks to incentivise industrial development in the state put distilleries and breweries, tobacco units, brick kilns, vanaspati ghee mill and rice shellers in the negative list that cannot get fiscal incentives, but for border districts only manufacturing of tobacco products including cigars, cigarettes and gukta are treated as negative list of industry.
The policy defines border district as the area within 30-km of the international boundary.
Industry sources, who refused to be identified, said the border area clause has caused resentment in some sections as they feel the policy which was last revised in 2015 had no category of 'border zone'.
Also, there was a negative list of industries for which there were no incentives in the earlier policy.
Sources said the new policy has for the first time created a new category of border zone which they claim will "kill" the particularly the 17 existing distillery units in the state.
A distillery in such zones has been kept out of the purview of GST and would be governed by VAT regime, they said, adding an exemption of 75 per cent of all state taxes has been introduced for the first time. Also, an investment subsidy by way of reimbursement of net VAT paid for a period in place of state GST has been given.
Sources said distillery industry already pays the maximum tax and 75 per cent exemption on state dues will "unduly" favour the one in the border zone.
Savera Beverages Pvt Ltd has already applied for availing of the incentives under the new policy.