Central Projects To Go ‘Untaxed’ In JK

SRINAGAR: In a decision that would expedite work on major projects under Prime Minister’s Development Plan (PMDP), Centrally Sponsored Schemes (CSSs), Deen Dayal Upadhyaya Grameen Jyoti Yojana (DDUUGJY), major projects and Integrated Power Development Scheme (IPDS) among others, J&K Government has decided to exempt all projects/consultancies from all the State taxes imposed on them.

“A decision to this effect has been taken by the State Government and will be formally announced very soon,” top official sources said.

The Union Government is reported to have pursued the issue with the State Government in view of delay in implementation of various Centrally Sponsored Schemes including the projects to be launched under Rs 80,000 crores worth PMDP, major power projects, electrification of villages etc and wanted exemption of Work Contract Tax, Entry Tax and all other taxes for all the projects/consultancies to be taken up in Jammu and Kashmir.

The Government of India wanted that if all these taxes were not waived off on Centrally Sponsored Schemes, the State will have to bear the cost of these taxes for timely implementation of flagship schemes, which were getting delayed on the issue of tax row.

The State Government had constituted a High Empowered Committee headed by Chief Secretary BR Sharma to discuss the issue of exemption of taxes on projects/consultancies for the Centrally Sponsored Schemes. The Committee has also submitted its report to the Government suggesting that the Cabinet should take a call on the subject.

Sources, however, said the State Government has now decided to exempt Work Contract Tax, Entry Tax and All Other Taxes applicable for all the projects/consultancies, which would be taken up under the PMDP, DDUUGJY, IPDS and other Centrally Sponsored Schemes, in Jammu and Kashmir.

“We have conveyed the decision to the Government of India (on exemption of taxes) on Centrally sponsored projects and urged them to take up the works immediately,” sources said, adding a formal order to this effect was also expected to be issued by the Government very soon as all formalities to this respect have been issued.

Sources said around Rs 6700 crores were likely to be released by the Union Government shortly under various flagship schemes including the PMDP for construction of various projects in the State in different sectors including the Highway and Prime Minister’s Grameen Sadak Yojana (PMGSY), power sectors including DDUGJY and IPDS etc.

“The release of funds will give boost to infrastructure development in Jammu and Kashmir,” sources said, adding that major projects being undertaken under the Centrally Sponsored Schemes, PMDP and other sectors included the Highways, power projects, road networks, electrification of villages etc.

Sources said the State Government would exempt Centrally Sponsored Schemes of various natures from payment of the taxes.

Some of the big companies had reportedly not been taking up the projects in view of taxes imposed by the State Government. They had made it clear that the payment of State taxes was not part of their contracts. They had suggested that either such taxes should be exempted or the State Government should pay them to facilitate taking up of their works and timely completion.

Prime Minister Narendra Modi had on November 7, 2015 approved Rs 80,000 crores worth Prime Minister’s Development Plan (PMDP) for Jammu and Kashmir, a large part of which was to be executed in the Central sector in the form of Highways, other major road projects, power sector etc.

Under the general Centrally Sponsored Schemes also, which are given to every State on yearly basis, the State has seen a jump in allocations and number of projects.

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