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Agrochem industry answers Jammu call
Latha Venkatraman
Mumbai
,
Jan. 21
THE country's agrochemical industry appears to have zeroed in on Jammu as its tax haven.
At least 10 agrochemical companies have set up facilities or are in the process of doing so and a couple more are likely to enter the State's industrial zone. Many of these units are at Samba Industrial Estate.
"Agrochemical companies are probably rushing to Jammu because not many States are keen on the chemical industry. The J&K Government is open to this industry," said one company official. These facilities would be free of the 16-per cent excise burden and enjoy an income tax holiday for 10 years.
The J&K Government had come out with its Industrial Policy in January 2004 inviting investment in the State primarily to bring in stability. Ensuring maximum local employment in industrial units was the main condition for approval to set up industrial units.
"These tax benefits would be substantial for some of the smaller companies and could reflect positively on their profitability," said Mr Narayandas Rathi, a senior official at Sudarshan Chemical Industries. The Sudarshan Group is also setting up a unit at Jammu.
The tax burden on the industry is sometimes as high as 30-35 per cent depending on the State where the company is located. Apart from a 16-per cent excise duty and tax on earnings, States such as Maharashtra impose a high sales tax of 10.3 per cent and a 4 per cent octroi. The positive impact on the bottomline could be as high as 8-10 per cent, Mr Rathi said.
Companies that have moved to Jammu include Insecticide Industries, Hindustan Pulverising Mill, Sudarshan Consolidated, Crop Chemical Ltd, Anu Products, Pioneer Pesticides, Krishi Rasayan Exports, Crystal Phosphate, Fungicide India, Jayashree Rasayam Udyog and United Phosphorus.
Most of these companies are using the Jammu base to carry out bulk formulation packaging operations.
"We may have invested up to Rs 10 crore in our Jammu operations and employed about 50 people," said Mr Rajubhai Shroff, Chairman, United Phosphorus.
According to him, the J&K Government is keen on inviting the industry to Kashmir too. "But there are security concerns in Kashmir while Jammu seems more safe," he said.
Overall, J&K is offering more tax incentives and concessions compared to other States. These concessions could augur well in a lean year, industry representatives said.
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