GCCI presents pre-Budget memorandum to Chief Minister Dr Pramod Sawant

The President of the Goa Chamber of Commerce and Industry (GCCI) along with other members met the Chief Minister Dr Pramod Sawant and presented him with a pre-budget memorandum.

The GCCI has compiled certain sector-wise suggestions that will help in increasing the Ease of Doing Business (EoDB), revenue and overall economy of the State.

• Mass Transit System
• No new taxes/ no increase in existing taxes to be imposed on Industry
• Efficient use of Central Govt Grants and disbursement to the needy to optimise funding of social security schemes.
• Reintroduce minimum threshold limits for registration under Goa VAT Act
• Stamp duty on Power of Attorney
• Centralise approvals and registration of projects at any point (creation of location-based offices).
• Infrastructure Tax in instalments, based on timeline
• A flyover / under pass at Verna Junction
• Expansion of NH between Cuncolim to Canacona
• Rs 10 crore is to be allocated for development of the system for recording, analytics, and publishing power quality indices to cut down on T & D losses.
• EV subsidy and relaxation in Renewable Energy project norms for industrial units
• Inclusion of Animal Husbandry, Dairy and Fisheries in the State Agriculture Policy
• Introduce Goa Retail Policy
• Infrastructure Development for dedicated mining corridors and river logistics
• Rationalization of stamp duty for mining industry to promote Ease of Doing Business
• Reduction in event fees and process simplification
• Modification of CMRY Scheme
• Public transport for night shift workers
• Introduce Wellness Policy for Goa
• Interim funding for DDSSY beneficiaries

 We have 23 Industrial Estates and there are always environmental and safety issues cropping up. Common Effluent Treatment Plants, Common Hazardous Waste Treatment, and Disposal Facilities, Common Fire Fighting System (Pump Room/ Hydrants) need to be constructed. These can be done on PPP basis.

A new and strong bridge at Borim is the need of the hour and needs to be expedited. The current bridge is very old and needs repairs. Truck terminals at industrial estates, better water, and power distribution systems etc are some of the urgent needs of the industry.

We had suggested that a three-to-five-member Task Force, under the Chairmanship of the Chief Minister / CS be set up to assess the problems faced by the existing units in Goa and also to  assess possibilities of reviving the closed units. We request formation of the same.

 The Government has taken steps to restart mining, till the mining activity picks up only manufacturing  sector  and  tourism  can  provide  stability  and growth  to  the  State  economy. In  this  light we put  forth  before  you  a few  suggestions  which may kindly  be  addressed  while  presenting the  forthcoming  State  Budget for  2024-25

 FINANCE

1. No New Taxes/ No Increase in Existing Taxes to be Imposed on Industry

• For the last several years, post the ban on mining, the industry has not put forth many demands as the State’s revenues have been under severe strain. The Industry in Goa which was  already  reeling  under  the  impact  of a  long  drawn  global  economic  crisis is slowly seeing green shoots.
• The impact of the recent hike in minimum daily wages has already burdened Goan businesses and levying new taxes/increasing existing taxes will drastically affect the Industry.
• Recently in December 2023, Finance Minister, Nirmala Sitaraman had replied to a supplementary question in the Rajya Sabha, regarding the GST Dues to the states. In her reply, the Finance Minister has categorically stated that that no GST dues of any state are pending before it. The Minister also stated that Goa has not submitted AG’s certificate for FY 2017-18, FY 2018-19 and FY 2019-20. It is also yet to send the report for FY 2021-22 and the first quarter of FY 2022-23.

Recommendation:

• We suggest that no new taxes/ no increase in existing taxes are imposed on the Industry in the Current State Budget.
• As the Finance Minister has stated that Goa is yet to submit the AG Certificates, we request that adequate resources be deployed towards completion of the tasks for the AG Certificate as well as recovering the GST dues from the Centre.
• We suggest that the guidelines/findings of the Central Finance Commission relating to Issuance of Grants be perused by the Government to ensure that the implementation of the guidelines can be made at the earliest. The implementations of the guidelines will help the State receive the allocated grants from the Central Government.
• Further, the Chamber is of the strong view that if the grants from the Centre are utilised properly, and the social security schemes on which huge public funds are spent are made open only to the needy, then there is no need for further taxing any strata of the economy.

2. Reintroduce Minimum Threshold Limits for Registration under Goa VAT Act

• The Goa Value Added Tax (Second Amendment) Act 2023 has amended the provisions relating to VAT Registration, wherein the erstwhile minimum threshold limits for registration have been withdrawn. This means that any new/ existing unregistered person in Goa dealing in liqour ( including restaurants) has to register and pay VAT on its liqour sale irrespective of the size of its turnover.
• The unregistered dealers were given time to register within 90 Days, the due date of which has expired in December 2023. As per the amended legislation, if any dealer fails to apply for registration within 90 Days, he will be classified as unregistered dealer retrospectively from 21-09-2023 & hence shall be liable to pay tax with interest besides the levy of penalty for failure to obtain Registration.

Difficulty/Issue:

• Every tax legislation in the country such as Income Tax, Goods and Services Tax as well as VAT laws in other states have a minimum threshold limit so that micro and small dealers are not burdened with compliance costs.
• While removing the threshold may help bring all dealers in the tax net and the formal economy, the compliance cost of monthly payments and returns may be difficult for the micro and very small dealers. There are many taverns and small bars in villages and remote areas of Goa who may not even be aware of the new Goa VAT provisions.
• Further these amendments have been introduced in the middle of the financial year, and there has not been adequate publicity to educate these small dealers.
• As of today, all unregistered dealers can be taxed as high as 22% plus interest and penalties; even though the dealers have not been made aware of the provisions nor have they have collected such VAT from their customers.

Recommendation:

• Reintroduce threshold limits with at least a small monetary value, which will help provide relief to the micro and small dealers in liquor. From a macro perspective, there will be no material loss in revenue since the threshold limits are exempting only very small dealers. These limits would need to be incorporated retrospectively so that the small dealers are not aggrieved for the interim period where registration was compulsory.
• Any major amendment should only be given effect from the starting of the financial year, so that all stakeholders have enough time to plan their compliances.

3. Amend VAT Law to ensure no disallowances of Input Tax Credit against Discounts Received

• In accordance to the Goa VAT Law, Liquor dealers make purchases from their suppliers and avail input tax credit on the tax charged by their suppliers.
• The suppliers, periodically, give incentives/discounts to the dealers for various reasons, eg: sales promotion/ cash discount etc. The Tax Department is of the view that these incentives are taxable and have reversed the tax of 22% on such incentives from their existing input tax credit. The Department has also demanded interests on these taxes.
• Many of these cases are disputed at the Assessing Officer level, First and Second Appellate Level. Some cases are also being challenged at the High Court.

Difficulty/Issue:

• The taxes charged to the liquor dealers by their suppliers against their tax invoices have been duly paid by them in the Government Treasury without any adjustment towards discounts granted to the dealers, and as such the ITC against such Tax Invoices is fully admissible to the appellant without any reversal.
• The taxing of discounts is now a double taxation in the hands of the dealers, who have already paid taxes at the time of purchase of goods.
• There are many case laws in the favor of the liquor dealers, such as Commissioner of Trade Taxes, Delhi v/s Challenger Computer Ltd [2017]77 com199 (SC). Further there is also a Kerala High Court decision in favor of the assesses in a similar matter – Priya Agencies v/s Commercial Tax Officer (A.A)(2008) 14 VST 293.
• Since this money is not collected from the suppliers, the tax(as high as 22%) and interests would have to be borne by the liquor dealers from their own pockets, and would adversely affect their financial condition.

Recommendation:

• The fact that significant number of cases are challenged at assessing officer, appellate and the high court levels suggests that there is grave injustice and that the Government should intervene in this matter and provide a clarification that such incentives/ discounts should not be reduced from the input tax credit, especially in the cases where the VAT has been charged by the supplier on the full invoice (before incentives/ discounts).
• The Industry is grateful to the Government for amending the VAT legislation to provide benefits of input tax credit to genuine and regular taxpayers who had not renewed their registration. It is disheartening to see that many of the assesses who had got relief due to the new amendments, have now been reassessed only to be burdened by a new issue of disallowing ITC due to discounts.
• We suggest that the Government amend the law to put the matter to rest, so that no incentives/ discounts are disallowed under the Goa VAT Act. In case the Government intends to bring any matter under the purview of the legislation, then the legislation should only be prospective, and all retrospective cases should be exempted.

4. Stamp duty on Power of Attorney

As per the amended provisions relating to stamp duty on Power of Attorney, full stamp duty equal to that of a conveyance is payable when such Power of Attorney relates to sale or development of a property.

In most of the cases where development of a building project takes places under an agreement for sale by the land owner and the builder, there is an agreement for sale followed by a Power of Attorney by the land owner to the builder for development.

Difficulty/Issues:

1. There is double stamp duty on the same transaction, one on agreement, and the other on POA.
2. As per the provisions, set off of stamp duty against the stamp duty on conveyance is available for agreements for sale. No set off provisions are available in case of a POA.

• In the event the power of attorney is not acted upon on the grounds like revocation or death of the Executants, etc, there is no provision for refund of duty

    The Stamp Duty on POA becomes an additional burden, which goes to increase the cost of construction which is already very high in Goa.

Recommendation:

A power of attorney is executed on account of the landowner not being available to carry out the sale. Instead of the landowner carrying out the sale, his power of attorney holder merely represents him to execute the sale deed. Hence we request withdrawal of Stamp Duty on POA.

REAL ESTATE

1. Centralize approvals and registration of projects at any point (creation of location-based offices).
2. Time limit to complete deed of Sale.
3. Agreement of Sale: Authority to register agreement of sale in the developers office subject to project approval from the registrar
4. Infrastructure Tax: should be charged 50% at the time of construction license, 50% at the time of occupancy
5. Mundkarial Plot Transfer – The rate at which the plot is sold decided by Mamlatdar. Right now, the stamp duty charged is high for the plots. It would be beneficial of the stamp duty is charged on the rate decided by the Mamlatdar.

LOGISTICS

• Also though new Road infrastructure is being created we need a Mass Transport system (MTS) in the state for reliable and easy commuting for passengers. We now have two airports in the State and passengers cannot depend solely on the fragile taxi system
• A Flyover / under pass at Verna Junction which has become a traffic bottleneck
• Expansion of NH between Cuncolim to Canacona
• Dredging of Inland waterways to promote Inland transport & backwater tourism
• Dredging of canals – Sant- Esteve, Miramar, Cumbharjua
• Replacing single-engine Ferries with Double engine Ferries
• Repairs to Ferry Ramps with Safety considerations

ELECTRICITY

1. Allocation of Rs 1000 Cr for Capital works for GED, with special emphasis on improvement of the Transmission system.
2. Rs 10 Cr is to be allocated for the development of the system for recording, analytics and publishing power quality indices.

The data regarding power purchase is being captured at SLDC [State Load Dispatch Centre] Margao. The Data Centre at Kadamba captures on-line power distributed at the substations and distribution transformers. The SAP system captures the data of all the consumers.

Analysis of this data will lead to

1. Efficient power purchase
2. Reduction of distribution losses
3. Identification of theft and wastage
4. Identification of weak links affecting reliability
5. Reduction in tariff

To analyse this data effectively, additional software and specialized human resources are required. E.g. Goa Institute of Management has a specialized 2-year full-time MBA Program called Big Data Analytics.

It is suggested that ED Goa should establish a specialized cadre for IT and Data Analytics, which should be separate from the existing team of electrical engineers. The necessary software is also to be acquired.)

1. Subsidy for Solar Plants below 90 KW, both for Industrial and Commercial should be continued and re-validated.

(This will encourage more and more usage of solar power which is a green power and freely available.)

4. It is important to have a renewable energy supply in Goa for manufacturing units having sustainability targets and export businesses. While Goa came up with an open access policy almost a year back no project could see the light.
   The policy states that 40 percent of installed capacity to be put in a battery-enabled storage system ex 100 MW project 40 MWH battery to be put in however GED is demanding to have 40 percent supply for 5 hrs (Evening peak 6 pm to 11 pm) which comes to 200 MWH of battery for 100 MW project it makes the project financially unviable.
   Also, GED is of the view to put additional peak energy charges for open-access consumers. With all these demands along with high land costs and limited land availability doing a solar project in Goa unviable, also there is uncertainty in policy which makes is riskier to put huge money into these projects. We request that Goa adopt the green energy open access policy of central government in line with other neighbouring states and also get away with requirements of battery and additional peak energy charges for open access consumers.
5. EV subsidy is awaited for a long period; this was declared in the last budget with an outlay of Rs. 25 Cr
6. A reward scheme is to be introduced to encourage Electricity Dept. Sub-divisions to reduce T&D losses within their own sub-divisions.

AGRICULTURE

1. Inclusion of Animal Husbandry, Dairy and Fisheries in the State Agriculture Policy: Above mentioned sectors are interdependent and cannot run in isolation from each other. Hence, it is our sincere request to make a holistic state policy, which brings together Agriculture and all the allied sectors such as Animal Husbandry, Dairy and Fisheries under a single policy regime.
2. Agriculture Minimum wages: Agriculture Minimum Wages notification vide 24/21/2009-LABIII/ (19)/569 dated 11/08/2023is made on par with Industries! While Draft notification vide 24/21/2009-LABIII/601 dated 10/11/2022 had Agriculture wages as a separate category and rate as per Central guidelines. But final notification issued has been made on par with Industries category, but only agriculture sector was increased by Rs. 87/- (Rs. 512/- per day) and all other sectors including Industries were reduced by approximately Rs.40/-. This notification is not pro agriculture and we request you to revise this rate to Rs. 425/- per day as mentioned in draft notification dated 10/11/2022.
3. Support to  local  farmers
4. Agro Service Centres

Agro Service centres may be promoted at Taluka level through cooperative societies who would hire out services of agri machinery to needy farmers. Here subsidy of 75 percent of cost of agri machinery may be provided as incentive from the government. This would generate rural employment and help to overcome the shortage of labour.

1. Commodity-based Farm Producers Organisations (FPOs)

The land holdings in the state being small, farmers find it difficult to generate marketable volume in spite of the best opportunities for local agro commodities like jackfruit, spices, mango, and various other minor fruits and vegetables including fodder. This can be overcome by vigorous promotion of commodity-based farmers’ producers’ organisation in the state. These groups could be linked to processing units and also brought within ambit of quality standards. This will help in better price, higher income to farmers and even for exports.

2. Promote Weekly Farmers’ Markets

Farmers had maintained supply chain of local produce in spite of all odds during corona pandemic. The weekly markets play an important role in such situations. It is proposed that each town and city or major villages be encouraged to maintain an open space for the local farmers based on krishi card to sell their produce directly to the consumer without having to pay for any tax /fees to local bodies. The Goa Liberation Anniversary funds or District Mineral Fund may be utilised for this purpose.

3. Refund scheme for 1% Market Fee reintroduced on Raw Cashews purchases outside of the Market Yard.

The government in 2022 reintroduced Market cess of 1% on the purchase of raw cashews in the state of Goa. This is cess to be paid to APMC for purchase made both within and outside of market yard. This makes cashew processing in Goa unviable and expensive as compared to the other neighbouring states. Hence we request the govt to devise a scheme to refund the market cess paid for the cashews which are processed in Goa. This will incentivize cashew processing within the state and will lead to job creation as well as make the cashew processing units in the state competitive vis a vis its units out of Goa.

RETAIL TRADE

• Introduce Retail Curriculum in Schools & Colleges
• Introduce Goa Retail Policy

MINING

1. Infrastructure Development for dedicated mining Corridors and river logistics:

Development of best-in-class infrastructure, especially for the logistics and processing of iron ore is a must for sustainable and environment-friendly mining in Goa.

Dedicated mining corridors from mine to jetty and widening of existing roads.

• Up gradation of jetties and river logistic infrastructure in tandem with road logistic up gradation, would increase corresponding evacuation capacity.
• Special incentive packages for promoting beneficiation of low-grade iron ore (below 51%Fe), adoption of green mining technologies for reducing carbon footprint etc.

2. Rationalization of stamp duty for Mining Industry to promote Ease of doing Business

There is a mismatch between the available resources or mine life vis-a-vis the provisions of stamp duty which is calculated on entire 50 years lease period. Prevailing stamp duty rate as laid down in the relevant Act of Goa is exorbitantly high as compared to other states. There are no specific provisions for establishing stamp duty for auctioned blocks in Goa. It is suggested that stamp duty in the state should be rationalized appropriately.

3. Utilisation of DMF & GIOPF funds to create Model villages:

Long-term planning and systematic utilisation of DMF and GIOPF (Goa Iron Ore Permanent Fund) would greatly help the mining ecosystem and result in effective outcomes for the mining-impacted communities.

• Utilise funds for developing skilled manpower in mining sector by supporting mining engineering degrees, diplomas in mining, etc. (under Skill Development Mission of Govt. of India)
• Develop alternate non-mining livelihoods for long-term through ITIs.
• Earmark 30% of the DMF and GIOPF funds for upgrading & creating mining infrastructure.

TOURISM

Tourism contributes about 18% to Goa’s GDP. Events in Goa are primarily responsible for major GST revenue to the state Government.

There is, however, a massive jump in the fees charged for events and the process is complicated:

1. The processing fees for permission for beach weddings/events have been increased from Rs.10,000/- to Rs.50,000/- at the 220th Meeting of Goa Coastal Zone Management Authority (GCZMA) held on 05/02/2020. The fees have been increased by 5 times! Now recently this has jumped and doubled to Rs 1,00,000/- per day + taxes.

The CRZ authority is NOT a point of sale to collect funds for the Government of India or the State of Goa. The mandate of the authority is to take measures for protecting and improving the quality of coastal Environment and preventing, abating and controlling environmental pollution in the areas of State of Goa. The powers and functions of the authority are subject to supervision and control of Central Government of India.

2. The Tourism Department used to issue NOCs for Rs 35000/- which included a Rs 20,000/- deposit which has now been increased to Rs 86000/- which includes Rs 20000/- deposit + taxes.
3. The Panchayat bodies are each having their own rates ranging from 10,000/- to 35,000/- per day + taxes
4. Department of Environment and Pollution Control have also levied a fee for checking of levels amounting to Rs 3000/- per application + taxes.
5. Sound License while not a direct financial cost has indirect costs that planners have to incur as the post to post running that is required, from Police to Collectors office and back multiple times over multiple days, alone adds up to more costs.
6. The unregulated and vicious Music Royalty licensing bodies – have a field day regularly increasing their costs yearly with total disregard to the plight of clients and the massive costs they have to bear. Example: A simple DJ setup for 50 pax costing around Rs 30,000/- needs Royalty Licences; upwards of Rs 1,50,000/- to Rs 2,25,000/- depending upon indoor or outdoor locations per day and in some cases per event.
7. Multiple NOCs are required from multiple departments from the same area for a single event – CRZ, Tourism Department, Panchayat and Music Royalty Bodies. Police and GSPCB have to be informed and their permissions sought.

GCCI Recommends:

1. Reduction of fees for beach weddings from Rs.86,000/- to Rs.50,000/-.
2. Collection of fees by GCZMA which is NOT a body for collection of funds for the Government to be discontinued.
3. Panchayat Permissions to be discontinued as the Beach DOES NOT come under their purview but is the responsibility of The Directorate of Tourism.
4. Music Royalty Licences – Here we recommend that taking into consideration the latest advisory from The Copyrights Registrar of India, exempting Weddings and Wedding related festivities under Section 52(i)(u)(za) –  we request that The Advocate General’s advice be taken and necessary circular may then be sent to the respective authorities.

1. Blanket Permission from CRZ to Tourism Directorate to allocate area in front of resorts on beach fronts to perform Marriages and charge fees as requested.
2. A simpler system / window for permissions for beach weddings involving only a  body such as The Entertainment Society of Goa (ESG.) A nominal amount to be paid to ESG which in turn will reimburse the other bodies their dues and the permission should be granted by the ESG for all bodies. This is being currently followed for all film shoots.

Under EODB, we request that business processes be made simpler:

1. Tourism-related fees for registration & renewal to be streamlined with no further increase in the next financial year.
2. Clearly defined steps are uploaded on the tourism website for all permissions related to tourism-related businesses.
3. App based taxi services to be promoted & protection to be given to the operators with a dedicated police helpline.
4. Implementation & enforcement of Taxi meters installed (Government has invested & provided free meters which are lying unused)
5. Streamlining of permissions & Single Window will help & encourage more businesses to register which will result in additional revenue to the government. (Many businesses are currently un-registered due to the tedious processes)

INDUSTRY

1. Modification to CMRY Scheme

The existing upper limit of project cost be increased from Rs. 25 lakhs to Rs. 35 lakhs. Further, existing 40% of project cost ceiling for working capital may be relaxed on case to case basis providing adequate collateral security.

2. Night time public transport for industrial workers

Many MSMEs in GIDC industrial estates are handicapped by inadequate or lack of public transport after 8pm which would help industrial workers to work in second shift, say, between 8pm to midnight. It is urged Kadamba bus service is started in the industrial estates between 8pm and midnight.

3. Water supply

Industrial units are handicapped by inadequate water supply at GIDC industrial estates. Furthermore, it is becoming difficult to install bore wells due to restrictions placed by NGT. Hence, special funds should be earmarked to WRD and PWD for making available dedicated water supply to GIDC industrial estates.

4. Uninterrupted power supply

GIDC industrial estates do not receive uninterrupted power or good quality  power form Electricity Department. This is due to inadequate capacity, ageing infrastructure with the sub-stations of the Electricity Department and at the sub-stations in industrial estates. Hence, funds should be earmarked to the Electricity Department to increase capacity, replace ageing infrastructure and to provide underground cabling in the industrial estates.

5. Environmental & Safety goals

In line with the Government’s commitment to promoting industrial growth with environmental sustainability goals, it is urged that additional funds are allocated to GSPCB for monitoring of air pollution at industrial estates and to Goa Waste Management Corporation to make handling of industrial waste easier for industrial units.

6. Common Effluent Treatment Plants, Common Hazardous Waste Treatment and Disposal Facilities, Common Fire Fighting Systems (Pump room/Hydrants) needs to be constructed. This can be done on PPP basis.

HEALTH & WELLNESS

1. Introduce Wellness Policy for Goa
   Government vide the policy should make it mandatory for all bedded hospitals and institutions/ organisations having more than 25 employees to create an in-house dedicated Wellness Department to promote preventive and social medicine along with state and national public health initiatives.
   These departments shall nominate a nodal officer as point of contact between the healthcare providers and various regulatory agencies for coordination.
   The following shall be in the purview of the department.

• Sensitise the public on healthcare schemes initiated by government and provide assistance in on boarding citizens in such schemes to ensure maximum outreach of such programs.
• Hold a minimum of 02 IEC sessions per year to Impart knowledge to the beneficiaries on preventive, promotive, curative and rehabilitative health.
• Promote wellness by integrating yoga, ayurveda and other holistic medical science.
• Hold awareness talks on ADR’s and misuse of drugs.
• Implement national health programs like Eat Right, Fit India, NTCP etc.
• Strengthen and participate in the reporting mechanism for notified diseases via appropriate channels to concerned authorities in time bound manner.
• Participate in surveys, discussions and state and national level activities related to preventive health and social medicine.
• Certification of Government and private Wellness providers by a nodal agency and give them accreditation.
• The policy shall define wellness providers including minimum set of standards in sync with existing guidelines to operate such wellness centres.
• The policy shall have provisions to assess and certify deemed wellness Centers.

2. Interim funding for DDSSY beneficiaries

The government needs to make budgetary provisions to make speedy payments to private hospitals under DDSSY schemes which are delayed due to administrative procedures. There is a need to explore alternate ways to fulfil the payments through advances from third-party funding agencies like banks, EDC Ltd etc. to streamline the process of clearing DDSSY applications.