The Federation of Chambers of Industries Kashmir (FCIK) urged the Government during the ongoing budget session to announce long?pending power and value added tax (VAT) amnesties for industrial units, saying the relief is essential for the survival of many struggling enterprises. The Federation said that prolonged financial stress has left a large number of units in severe distress or turned them sick, driven by the impact of Covid?19, the 2019 re?organisation and a slowdown in public procurement.

The Federation described how weak business activity has prevented many units from using electricity up to their sanctioned capacity and said several enterprises have defaulted on payments to the Kashmir Power Distribution Corporation Limited (KPDCL) due to lack of funds. It said electricity bills include heavy demand charges and compounded interest, which have made repayment extremely difficult and unviable for affected units.

FCIK recalled that over the past three years the Government announced two amnesty schemes for domestic consumers that provided complete waiver of interest and allowed payment for actual electricity consumption in instalments. On the same analogy the body sought a power amnesty for industrial consumers with specific demands for waiver of demand charges, waiver of interest and surcharge, billing only for actual electricity consumed and the option to clear arrears in 12 monthly instalments.

The Federation also raised concern at notices related to value added tax from the pre?GST period and argued that industry had been exempted under the former VAT regime through a remission mechanism and had not collected VAT from customers. FCIK said that at the time of transition to GST in 2017 industry was promised a clean slate and it therefore sought a non?discretionary VAT amnesty to close pending cases and withdraw demands, a request that the Chief Minister and the Chief Secretary have been asked to consider.