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GOVERNMENT OF TAMIL NADU ABSTRACT Industries - Incentives - Extension of Interest Free Sale Tax Deferral Concessions for the change of Management and Diversification of the Unit - Orders - Issued. INDUSTRIES (MIF1) DEPARTMENT G.O.Ms.No.31 Read: 1. G.O.Ms.No.500, Industries (MIG2)Department, dated 14.5.1990. 2. G.O.Ms.No.43, Industries (MIG2)Department, dated 13.2.1992. 3. G.O.Ms.No.191, Industries (MIG1)Department, dated 20.5.1992. 4. G.O.Ms.No.83, Industries (MIG2)Department, dated 24.2.1993. 5. G.O.Ms.No.99, Industries (MIG2)Department, dated 4.4.1994. 6. From Tvl. Velan Textiles Private Limited, Tiruppur petition dated 8.7.2002. 7. From the Special Commissioner and Commissioner of Commercial Taxes, Chennai-5, Letter No.Q2/48645/2002, dated 20.8.2002. -0- ORDER: In the Government orders first to fifth read above, Government have issued orders extending Interest Free Sales Tax (IFST) deferral concession to the new Industrial Units and for expansion / diversification of the existing Industries. 2. In the meeting held on 24.10.2002 on extension of IFST deferral Concession for change of management and for diversification of Unit, the following issues were discussed for taking a final decision:- 1. Merger and Demerger ordered by High Court. 2. Transfer of Deferral facility of the Unit to either a subsidiary company or a take-over company. 3. Sale of the Unit. 4. Closure of the unit. 3. The Government after careful examination and on the basis of the decisions taken in the meeting held on 24.10.2002 on the above issues, issue the following orders:- I. Merger and Demerger ordered by High Court. In the category where mergers and demergers have been ordered by the High Court, revision of Eligibility Certificate shall automatically be done by State Industries Promotion Corporation of Tamil Nadu (SIPCOT), Director of Industries and Commerce (DIC) and Tamil Nadu Industrial Investment Corporation Limited (TIIC) as the case may be and the Assistant Commissioner, Commercial Taxes be informed to take cognizance. There should however be no change either in the deferral amount or in the deferral period (as given to the original company) while executing the revised Eligibility Certificate. 2. Transfer of Deferral facility of the unit to either a subsidiary company or a take-over company. In the category of transfer of deferral facility to either a subsidiary company or a take-over company, the genuineness of the transaction shall be determined by SIPCOT, DIC and TIIC. as the case may be, after inspection and verification of original records. At the time of issuing the revised Eligibility Certificate, the concurrent liability of the transferor and the transferee shall be obtained by SIPCOT, DIC and TIIC depending on the Agency involved. In genuine cases, the revision shall be given effect to in the Eligibility Certificate without changing the original time period or the amount. The liability to pay the above devolves on the transferee company with guarantees from the transferor company. If the transferor company ceases to exist and the transferee company binds itself to the liability in a genuine manner, the Eligibility Certificate shall be revised accordingly, after due satisfaction by SIPCOT, DIC and TIIC as the case may be. For the units which have partly availed of the IFST Deferral / waiver facilities, concurrent liability of the transferees and transferors shall be obtained i.e. in the event of the transferees fail to meet the obligation, the transferors should be liable to pay the balance amount. For this purpose, legally enforceable agreements shall be obtained from the transferors. For the units which transfer the liability after availing of the entire deferral/ waiver facilities, then the liability to pay the deferral amount would devolve on the transferee company with guarantees from the transferor company. This will be done after due satisfaction by SIPCOT, DIC and TIIC as the case may be. However, for this purpose, legally enforceable agreements should be obtained from the transferor and the transferee. 3. Sale of the Unit In the case of sale of unit, after the period of the deferred liability with or without any default, there should be a clean commitment from the buyer-company to pay the dues of the seller-company as per the original Eligibility Certificate. This should be certified by inspection and verification of records by SIPCOT, DIC and TIIC. In cases where there are hive offs/sale, where IFST deferral / waiver facilities form a part of sale consideration, the deferral / waiver benefits availed of by the units will be recalled. In cases of sale / replacement of assets by the current unit enjoying the deferral facility with /without permission of the Assistant Commissioner (Commercial Taxes), the replacement of assets may be permitted by the Assistant Commissioner (Commercial Taxes) subject to fulfilling of other conditions. The sale of assets replacement without permission will entail violation of the deferral scheme conditions. 4. Closure of the Unit In the case of closure of the unit after the deferral period, the existing provisions will continue to operate without any change, for penal action and recovery. 4. This order issues with the concurrence of the Commercial Taxes and Finance Departments vide their U.O No.2508 / F1/ 2003-1, dated 6.2.2003 and 1580 / FS / P / 2003, dated 20.1.2003. (BY ORDER OF THE GOVERNOR) K.SKANDAN To The Chairman and Managing Director, State Industries Promotion Corporation of Tamil Nadu Limited, 19-A Rukmini Lakshmipathy Road, Egmore, Chennai-8. The Director of Industries and Commerce, Chepauk, Chennai-5. The Managing Director, Tamil Nadu Industrial Investment Corporation Limited, 692, Anna Salai, Chennai-35. The Special Commissioner and Commissioner of Commercial Taxes, Chennai-5. The Commercial Taxes (BC/DOF)Department, Chennai-9. The Finance Department, Chennai-9. The Small Industries Department, Chennai-9. Copy to: The Industries (OPII) Department, Chennai-9. Sr.P.A to Minister (Electricity & Industries), Chennai-9 Sr.P.A to Minister (CT), Chennai-9. Sr.P.A. to Minister (Finance), Chennai-9. SF/SCs. /Forwarded by order/ Section Officer.
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