Sops for hilly states to continue

NEW DELHI: Industrial units in hilly states of Himachal Pradesh, Sikkim and Uttaranchal will continue to enjoy exemption from central excise duty till ’10.

Centre has, through a notification, extended the exemption to these states which were expiring from March 31, ’07 despite opposition from Punjab and Haryana.

In 2003, the Centre had decided to provide tax exemptions to certain states including Himachal, Sikkim and Uttranchal. The special package which was aimed at boosting industrial development in these states included 100% excise duty exemption on the output of a new unit for 10 years from the date of commercial production.

The package was given as part of the industrial policy aimed at giving a fillip to development in these states, which had not witnessed much industrialisation due to their geography.

Major incentives under the industrial package included income tax holiday and excise duty exemption for new and expanding units in three special category hilly states and the original period of the package was up to March 31, ’13.

While the income tax holiday is available till March 31, ’13, the excise duty exemption was curtailed till March 31, ’07.