Jammu and Kashmir Finance Minister Abdual Rahim Rather, in his recent state budget, announced various steps to encourage the IT industry in the state. In the budget, he decided to extend tax concession for one more year to the industrial units registered in the state and which have been enjoying tax concessions under the relevant packages of incentives announced by the government, regularly.
However, these concessions may get withdrawn after the implementation of Goods And Services tax (GST) regime.
With the switch over to the VAT regime, these concessions were supposed to have come to an end but were continued in a modified manner. Serious discussions have been taking place at the national
level through the Empowered Committee of State Finance Ministers and other national level workshops to switch over to a uniform national level Goods and Services tax (GST) regime in the interest of bringing in further transparency, simplicity and efficiency in tax administration and removal of the cascading effect of the tax burden on the consumers. The proposed date of implementation of GST has been deferred from time to time because of a lack of unanimity among the states.
Tax concessions to the industry cost nearly Rs 500 core annually. Hence, the finance minister has further extended benefit of this tax concession to the industry for a further period of one year or till adoption of the proposed GST regime by the state, whichever happens to be earlier.
The period of concession expires on March 31, 2012. On the aforementioned considerations which are still valid, for further period of one year upto March 31, 2013 or till adoption of the new
GST regime by the state.
With a view to further boosting the use of IT among the youth, he proposed to wholly exempt computers and all the IT related items from the levy of VAT. These products are laptops, palmtops and use of computer peripherals like pen drives, CDs, memory cards, chips, headphones, computer cleaning kits, electronic diaries etc.