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Steep rise in consent fee a burden on industry, says KCCI

Our Bureau Mangaluru | Updated on March 01, 2021

Industry body seeks revision, rationalisation of the 800 to 1,000% rise in fee

The Kanara Chamber of Commerce and Industry (KCCI) has said that the revised consent fee to operate under the Karnataka State Pollution Control Board (KSPCB) rules has led to an increase of more than eight times in the charge for some medium and large industries.

In a memorandum to Karnataka Environment and Ecology Minister, CP Yogeshwara, during his visit to Mangaluru, the president of KCCI, Isaac Vas, said that the consent fee structure is linked to the capital investment of industries, and various slabs of capital investment are defined.

(According to Vas, consent fee is the amount that an industry pays to the State Pollution Control Board as a fund for its activities and for its expenditure for the control of pollution.)

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The Karnataka government has revised the consent fee payable under the Karnataka Water (Prevention and Control of Pollution) Rules 1976, and Karnataka Air (Prevention and Control of Pollution) Rules 1983.

Under these revised rules, the lower and higher slabs have been revised, and industries having capital investment of more than ₹25 crore are to pay on the basis of percentage of their capital investment compared to the earlier existing fixed amount.

The fee has to be paid in advance at one time for the whole consent period (that is 5, 10 and 15 years wherever applicable). He said this results in sudden financial burden on industries, especially for medium and large ones, as they do not have the option to pay the fee for a lesser period. Some medium and large industries have to pay more than 8-10 times their existing consent fee in the new system.

He said the industry stakeholders were assured that consent fee would not go beyond 30 per cent to 40 per cent over the existing consent fee when the proposal on its increase was mooted. “However, the increase of 800 to 1,000 per cent to certain classifications is beyond sustainability and against assurances and all tenants of natural justice,” he said.

Stating that a number of industries have written to KCCI on this sudden ‘unjust rise’ in consent fees, Vas said: “Industries are facing a tough situation due to surge in raw material prices and reduction in demand. Sustainability is a question in these difficult times. Such additional financial implication will cause further hardship to the industries.”

Medium and large industries with an investment of over ₹25 crore are penalised for their capital cost. This is a disincentive for employing environment-friendly technology which naturally is capital intensive, he said.

Urging the government to rationalise and revise the new system of paying consent fee on the basis of percentage of fee on capital investment, he said, there should be a cap for the fees beyond a certain amount. Capital investment is needed for growth as also to reduce pollution and sustain the environment too.

Paying the increased upfront fees for five years at one time adds to this huge burden and affects the cash flow and working capital. “Along with a relook at the rates, we request (permission for) annual instalment for these payments,” he said in the memorandum.

Published on March 01, 2021

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