The credit starved micro, small and medium enterprises (MSMEs) in Jammu have as much as Rs 206 crore pending with the Industries Department of Jammu and Kashmir. The small entrepreneurs have their claims of turnover incentive and GST link incentives pending with the respective departments for the Financial Year 2021-22. The claims for FY 2022-23 are yet to be filed now. This has made the small units getting their working capitals blocked.
Talking to TICE News, Lalit Mahajan, Co-Chairman, Federation of Industries Jammu and President of Bari Brahmana Industries Association (BBIA), said, “The new units being set up in the region get GST reimbursement is done on quarterly basis under the Central Package scheme. The units that one come under production have claimed for the incentive but it has not been processed so far. The reason is that there is no guidelines to process the claim so far. This claim is filed quarterly, so because of this at the end of every quarter a new claim is being filed and the older ones are getting piled up. The working capital of the small units is blocked. They plan their expenditure and investments accordingly.”
“Pinning hope on the claims, they are passing the cost benefits to the customers and selling them in the reduced prices. This way they are just blocking their working capitals. The second issue is that the government had declared to give turnover incentive to the existing units. Take entire Jammu and Kashmir, there are approximately 2-3 thousand units who are eligible based on turnover criteria. They have a budget of Rs 50 crore, and the claims for FY 2021-22 is Rs 206 crore, and the claims for FY 2022-23 claim is yet to be filed. This will further block their working capital. The MSMEs need the refund and have requested the Industries Department to process it at the earliest but the response is still awaited,” Mahajan added.
In this regard an urgent meeting of the BBIA was convened under the Chairmanship of Lalit Mahajan. The meeting aimed to discuss the pressing issue of pending Claims of Turnover Incentive to Existing Units and GST Linked Incentives to new units.
Concerns Raised Over Pending Claims of Turnover Incentives By Jammu MSMEs
During the meeting, several members expressed serious concerns about the unresolved claims of Turnover Incentives for Existing Units in Jammu and Kashmir Union Territory (JKUT).
“These pending claims amount to a staggering Rs. 206 Crores for the Financial Year 2021-22. The funds required for settling these claims currently stand at 50 Crores, leaving a significant gap of Rs. 160 Crores. The Industries Department had already communicated this additional demand to the Finance Department, but no action has been taken so far, resulting in Existing Units suffering immensely due to the financial strain,” BBIA said.
Challenges Faced by New Units in Acquiring GST Link Fiscal Incentives
Jammu MSMEs Seek Government Intervention
The MSME sector already face issues with regard to fund and liquidity, further adding to the woe is the pending claim issue faced by both existing and new units.
The members of BBIA have earnestly sought intervention of the Lt. Governor, Manoj Sinha, and Vikramjit Singh, Commissioner, Industries & Commerce Department.
The association has appealed the Industries Department for the grant of additional funds of Rs 160 Crores to release the Turnover Incentives for the Financial Year 2021-22 to existing units.
Furthermore, the BBIA has urged for necessary directions to be issued for the prompt sanction of GST Linked Incentive Cases for new units on a priority basis. This, they believe, will provide much-needed relief to the unit holders who are struggling to sustain their operations amid the pending incentives.
BBIA said, “The urgent meeting held by BBIA has highlighted the critical issue of pending incentive claims for both Existing as well as New Industrial Units in the region. The lack of prompt action by the Finance Department in releasing the funds for Turnover Incentives has put the financial well-being of existing units at risk.”
Simultaneously, BBIA pointed that the new units are grappling with blocked funds, affecting their viability and growth prospects.
The apex industry association for the small units in J&K has sought urgent intervention of Lt. Governor and Commissioner Industries & Commerce Department for allocation of additional funds to address these challenges promptly.
Resolving these issues will not only alleviate the financial burdens faced by the industrial units but also foster a conducive environment for industrial growth and development in the region, BBIA said.