Small scale industries have taken help of state goverment in setting right anomalies
With recent proposal of the State government to hike the power tariff by 30-40 per cent there are possibilities of small scale industries shutting
Chennai: Small-scale industrial units of the Ambattur Industrial Estate have sought the help of the state government in setting right anomalies related to power tariff, tax-related issues and PF regulations.“With the auto industry in the doldrums already, small units like us are already facing the brunt. But with the recent proposal of the State government to hike the power tariff by 30-40 per cent, we will be forced to shut down our units,” said Mr Sai Sathya Kumar, president of Ambattur Industrial Estate Manufacturers Association (AIEMA).
The majority of the 2,500 units in the 1,400-acre industrial estate are auto components firms with annual business worth Rs 30,000 crore. However, the units claim to have been facing rough weather already, with anomalies over VAT reversal norms in the state that came into force in November 2013.“For example, CST is chargeable at 2 per cent on interstate sales and MSME units are required to reverse 3 per cent of VAT for such sales. This is only in TN and nowhere else,” he said.
Though this problem may be solved once GST is in place, for now, all sales to units outside the state entail a loss of 3 per cent for the seller owing to the VAT norms, Mr Kumar explained.This apart, the hike in contribution ceiling for PF from '6,500 to '15,000, calculated on total wages, has cast a heavy burden on small units leading to disputes.
In the wake of such a tough situation, the proposed steep hike in power tariff will sound the death knell of MSMEs. The government should preferably leave MSMEs untouched or look at a very modest increase in tariff rates, the AIMEA said in a representation to the state rural industries department.
( Source : dc correspondent )
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