FCIK advocates for uniform SGST reimbursement to MSMEs

Srinagar, Oct 25: The Federation of Chambers of Industries Kashmir (FCIK) has called on the new government to address disparities in the State Goods and Services Tax (SGST) reimbursement for manufacturing units selling goods outside Jammu and Kashmir. The organisation seeks to align these incentives with those offered to businesses selling within the Union Territory.

In a communication addressed to the Deputy Chief Minister, Surinder Chaudhary who oversees the Industries and Commerce Department, FCIK raised concerns about the exclusion of industrial units engaged in interstate sales of finished goods. This exclusion, they argue, creates inequities and discriminates against manufacturers that are essential to promoting the sector's growth.

FCIK reminded the Deputy Chief Minister of the government’s 2018 initiative under SRO-63, which aimed to provide budgetary support to manufacturing units following the withdrawal of VAT remission during the Value Added Tax regime. They emphasized that both intra-state and interstate manufacturers suffered due to this withdrawal. However, the omission of interstate suppliers from SGST reimbursement stifles the growth potential of local manufacturers seeking to expand their markets.

"While manufacturers making intra-state or interstate sales have equally suffered due to the withdrawal of previous incentives, excluding interstate suppliers undermines competitiveness and limits expansion opportunities," stated FCIK in their letter. They further questioned the rationale behind this exclusion, arguing that encouraging interstate suppliers is vital for the overall economic development of Jammu and Kashmir. Such support could enhance production capacities, create jobs, and elevate the region's standing as a manufacturing hub. Additionally, bolstering exports could improve J&K’s trade balance by reducing trade deficits.

To promote fairness and inclusivity, FCIK has urged the J&K government to revisit this scheme and develop a revised policy that treats all manufacturers equitably, regardless of their market reach. The federation expressed optimism that such a policy revision would not only stimulate growth but also improve the overall economic landscape of the region.

Furthermore, FCIK noted that various states across India have implemented policies to incentivize manufacturers without regard to market reach. They cited the state of Uttar Pradesh as a model, highlighting its inclusive approach that encourages both in-state and out-of-state sales without imposing conditions related to the registration date of units.

In a related development, a delegation led by FCIK President Shahid Kamili recently visited Deputy Chief Minister Surinder Kumar Choudhary to congratulate him on his new role. Former FCIK President Meraj Qureshi accompanied Kamili, proposing an interactive session with FCIK constituents from across the Kashmir Valley. The Deputy Chief Minister expressed enthusiasm for the initiative and readily accepted the invitation. Plans are currently underway to schedule this important session, aimed at fostering productive dialogue between government officials and industry stakeholders.