<Punjab to take Centre to court on tax breaks Joe C Mathew / New Delhi February 19, 2008 The Punjab government has decided to oppose the central government's 2003 area-based tax exemption scheme in the Supreme Court on the grounds that the policy had resulted in significant revenue erosion and job losses for it....The state claimed these losses have been caused by several industries migrating to nearby Himachal Pradesh as a result of this scheme, which runs till March 2010 ....Janjua claimed that 90 per cent of pharmaceutical manufacturing units in Punjab have shifted to areas like the industrial town of Baddi in the Solan district of Himachal Pradesh. **The migration of industrial units to tax-free states has drawn complaints from several chief ministers, including those of Punjab and Andhra Pradesh, and dozens of Parliamentarians**. The central government's special area-based exemption package was mainly targeted at hill states (in the north-east, Uttaranchal, Jammu & Kashmir, Himachal Pradesh) and the Kutch district of Gujarat to encourage new industrial investment in those regions. All units set up in these regions between 2003 and 2010 are exempt from excise duty for 10 years and income tax for the first five years, followed by a 50 per cent income tax exemption in the remaining five years. These industrial units also enjoy concessional central sales tax.> http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKe yFlag=IN&autono=33821
Local reporting about loss of tax revenues in recent years has not highlighted this aspect though there were some vague hints earlier. Nor have there been any reports about the Goa government or its MPs complaining about the corporate exodus out of the state for tax reasons as other states and their MPs have reportedly done. Maybe Goa prefers to think that it is kicking the corporates out -- Pele style!
