The government is likely to impose 17% GST and 5% income tax in the electricity bills which, coupled with Rs 1.5 per kWh increase in tariff, would have devastating effect on the industrial growth including the exporting industry where zero rating facility would be withdrawn from July 01, 2019.
It may be noted that the non-exporting industry is not eligible for refund of the GST which would have a dire impact on its growth. So much so, about 40 percent production of exporting industry is also being sold in domestic market which would have to suffer like other non-exporting industry. The power sector experts have apprehended that any such situation would devastate the industry by and large.
Sources in the ministry have pointed out that the government would notify increase of Rs 1.5 per kWh tariff after passage of the budget from the Parliament. If the government imposes GST on the industry, tariff would shoot up to the extent that it would have devastating effect on the industrial growth. Some 17% GST and 55% income tax would be added to the tariff which has been raised by the government by Rs 1.5 per kWh. It may be noted that the industry has already been heavily burdened with tariff and imposition of taxes would make it further burdensome. Already, the Discos passed on line losses to the industrial feeders which was a big source of irritation for the industrial consumers.
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