Centre's move to curtail NEIPP hits HC block

By Our Staff Reporter

Guwahati, Dec 12: In a reprieve to industry in the region, the Gauhati High Court has quashed a Central government notification suspending registration of new industrial units under the North East Industrial and Investment Promotion Policy (NEIPP).  

The interim order was handed down by the court on a petition filed by the Federation of Industry and Commerce of North Eastern Region (FINER)

The Central government had issued a notification on December 1, 2014, suspending registration of new units under NEIIPP.

 Taking up the FINER’s petition on December 7, Justice Hrishikesh Roy issued an interim order stating: “...noticing the requirement of compulsory registration specified by the ministry’s letter dated 13.06.2013, the registration of the eligible members of the petitioner’s association is ordered as an interim measure.”

Whether the new units would be eligible for enjoying benefits under the industrial policy would be “considered” at an “appropriate stage”, the single bench said.

The Centre’s December 2014 decision meant that no new units, which are registered post December 1, 2014, would be eligible for enjoying the benefits under NEIIPP. The Centre had cited fund crunch as the reason behind taking the decision, though it said it was a temporary measure.

However, the Union Fince ministry vide a circular dated December 2, 2015 had restored excise duty exemption for new units.

 “We are now expecting to hear from the Centre after the High Court’s order. This is a relief for us. The Centre’s decision to suspend new registrations was unilateral and taken without consulting any stakeholders. It was a severe blow to the development and industrialisation of the region,” said RS Joshi, chairman of FINER.

He added: “Tinkering with clauses of an industrial policy which has a fixed validity period sends wrong sigl to the investors and hampers future investment. A comprehensive industrial policy will surely help the region attract investments, given that the Centre has been aggressive in attracting investments in manufacturing sector through the ‘Make in India’ campaign. Without an industry friendly industrial policy, the Northeastern region will just remain a consumer, and the rest of the country would be manufacturing.”

NEIIPP was an extension of the previous North East Investment Policy (NEIP) which was announced in 1997 by the Central government with a ten-year term period. NEIIPP was announced in 2007 and is due to end on March 31, 2017. As per the provisions of NEIIPP, industrial units in the region are eligible for 100 per cent income tax exemption, 30 per cent capital investment subsidy, excise duty benefits varying from goods to goods, and interest subsidy, among others.