Document Fragment View

Matching Fragments

We may apply the above ratio to the cases on hand. We may take note of the incentive scheme in question. The same was named, Incentive for modernization by Existing Industrial Units : 1990-95 . It was announced by the Government as a part of new industrial policy, to accelerate the industrial development, to disperse industries to under-developed areas as well as to provide additional employment. Preamble to the resolution dated 2nd January 1991 under which the scheme was framed records that it was represented to the State Government that on account of rapid changes in technology and need to upgrade technology in industries, it is necessary to encourage modernization and evolve a scheme for incentives towards modernization. With these purposes in mind, the said scheme was framed. Term, modernisation was defined in clause 2{i} as under :-

3. Units claiming the incentive under this Scheme will not be eligible for sales tax incentives under any other Scheme.

From the above provisions contained in the said Scheme, it can be immediately noticed that the scheme was framed as a part of Government s initiative to encourage modernization of existing industries in under-developed areas. The main purpose of the scheme was to accelerate the industrial development and to disperse industries to under-developed areas as well as to provide additional employment. The Government responded positively to the representations that on account of rapid changes in technology, there was constant need for upgradation of technology in industries. It was, therefore, necessary to encourage modernization. As part of such a scheme, incentives were given to industries existing in under-developed areas to undertake modernization. The scheme thus was primarily concerned with the modernization of the existing industries. It was not a scheme either for development of new industries in specified areas, or for mere expansion of the existing production capacities of the industries. Thus, the main purpose of the resolution was to modernize industries, which ordinarily would come at a considerable cost, particularly when such industries were located in under-developed areas. It can be imagined that the industries will find it difficult without Government s incentive to undertake large-scale modernization with the use of modern technology. It was for this purpose that the said scheme was framed giving benefit of the Sales Tax Waiver/Deferment, at the option of the industry concerned. Such benefit had to be computed in terms of the percentage of the fixed capital investment. Benefits were to last for specified periods and upto exhausting maximum limit computed in terms of the percentage of the fixed capital investment.