Registration of new units under Northeast Industrial Policy be allowed: Gauhati HC

Whether the new units would be eligible for enjoying benefits under the industrial policy, the Court said it would be 'considered' at an 'appropriate stage'Whether the new units would be eligible for enjoying benefits under the industrial policy, the

In what will be perceived as a relief to the industry of Northeast, the Gauhati High Court, in an interim order, has stated that registration of new industrial units under the Centre-sponsored North East Industrial and Investment Promotion Policy (NEIIPP) should continue. The Centre had vide a notification dated December 1, 2014 had suspended registration of new units under NEIIPP.

The industry of the region, under the banner of ‘Federation of Industry and Commerce of North Eastern Region’ (FINER), moved the High Court on May 12, 2015, challenging the Centre’s decision. On December 7, Justice Hrishikesh Roy of Gauhati High Court came out with the interim order in which it said: “...noticing the requirement of compulsory registration specified by the ministry’s letter dated 13.06.2013, the registration of the eligible members of the petitioner’s association is ordered as an interim measure.”

Whether the new units would be eligible for enjoying benefits under the industrial policy, the High Court said it would be “considered” at an “appropriate stage”. “But regarding the benefits that are to accrue upon such registration, the same will be considered by the Court at an appropriate stage.”

The Centre’s December 2014 decision meant that no new units, which are registered post December 1, 2014, would be eligible for enjoying the benefits under NEIIPP. The Centre had sited fund crunch as the reason behind taking the decision, though it said it was a temporary measure. However, the Union finance ministry vide a circular dated December 2, 2015 had restored excise duty exemption for new units. “It is clarified that new units or units undertaking substantial expansion shall continue to be eligible for excise duty exemption,” it said.

“We are now expecting to hear from the Centre post the High Court’s order. This is a relief for us. The Centre’s decision to suspend new registrations was unilateral and taken without consultation with any of the stakeholders. It is a severe blow to the development and industrialisation of the region,” said R S Joshi, chairman of FINER.

He added: “Tinkering with clauses of an industrial policy which has a fixed validly period sends wrong signal to the investors and hampers future investment. A comprehensive industrial policy will surely help the region attract investments given the Centre was aggressive to attract investments in manufacturing sector through the ‘Make in India’ campaign. Without an industry friendly industrial policy, North Eastern region will just remain as a consumer, and the rest of the country would be manufacturing.”

NEIIPP was an extension of the previous North East Investment Policy (NEIP) which was announced in 1997 by the central government with a ten-year term period. NEIIPP was announced in 2007 and is due to end on March 31, 2017. As per the provisions of NEIIPP, industrial units in the region are eligible for 100% income tax exemption, 30% capital investment subsidy, excise duty benefits varying from goods to goods, interest subsidy, among others.