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Goverment Representation by FGI

Representation was made to Shri Saurabhbhai Patel, Hon’ble Minister of State for Industries to amend the State Government policy relating to EMD, Security Deposit and Performance Bank Guarantees insisted by GUVNL from MSMEs

The FGI had represented to Shri Saurabhbhai Patel, Hon’ble Minister of State for Industries, Gujarat State that the MSME units, while submitting their offers against tenders floated by the discoms of GUVNL have to bear heavy financial burden of security deposit and performance bank guarantee.

The FGI had submitted to the State Government to reduce the security deposit and performance guarantee rates imposed upon MSMEs during process of obtaining quotes for the supplies to be made by them to the discoms of GUVNL.

Pursuant, to persistent follow up action taken by FGI in the interest of MSMEs of the State of Gujarat, Federation is delighted to inform that GUVNL has issued a letter dated 13th March 2012 stating that for the Gujarat based small, cottage and tiny industries the rates in respect to security deposit and performance guarantee have been reduced as under :

  1. Security deposit rate has been reduced from 10% to 6%.
  2. In case where performance guarantee rate has been 10%, it has been reduced to 6% and where it is 5%, it has been reduced to 3%.

Members of FGI and Tiny, Micro and Small Industries in the State of Gujarat are requested to take note of the benefits accruing to them due to efforts of the FGI.

Earlier, during the year 2011-12, in response to FGI representation, Shri L Chuaungo IAS, Managing Director, GUVNL had resolved two out of three issues. A letter dated 28th June 2011, confirming relief granted for providing level playing field to MSMEs in Gujarat was issued confirming relief to following effects:

  1. Before commencement of supply, Security Deposit shall be obtained and before completion of last stage of supply, Performance Bank Guarantee shall be obtained. It is not required to take both the Security Deposit as well as Performance Bank Guarantee together initially.
  2. It was directed by GUVNL that releasing of Security Deposit and Performance Bank Guarantee should be done without delay after observing techno commercial formalities. Security Deposit should be released immediately after satisfactory completion of supply. It has been specified that before completion of guarantee period, all information should be collected and refund of Performance Bank Guarantee should be processed and it should be released on the 31st day after completion of Guarantee period.

The FGI is thankful to Government of Gujarat, especially to Shri Saurabhbhai Patel, Hon’ble Industries Minister and to Shri L Chuaungo IAS, the then Managing Director of GUVNL and to Shri Mukesh Puri IAS, present Managing Director, GUVNL for extending their support in upholding interest of Small & Medium industries.

Petition Filed with Gujarat Electricity Regulatory Commission (GERC) in matter of MGVCL Tariff Structure submitted to them for Tariff revision

In a petition filed by FGI with GERC in matter of MGVCL’s proposal for power tariff revision, the Federation had made a detailed submission stating that it strongly opposed the GERC determining a common tariff for all the four discoms, which was in violation of the Indian Electricity Act 2003.

The four discoms had sought 25 paisa/unit increase in power tariff rate. Their demand was not justified and was contended before the GERC by FGI. Objections were raised on issues adversely affecting the interests of industrial sector like cross subsidy burden on industries, T & D losses, non-metering of agricultural connections and many other practices of MGVCL.

Filing a petition by FGI before GERC in respect of MYT proposal of MGVCL did not serve the purpose and hence Hon’ble Commission was requested to direct the GUVNL (holding company) to file a petition based on amalgamated parameters of all four discoms.

Representation made to GERC

The FGI has represented to GERC against its amendment relating to Security Deposit in favor of consumers having contract demand of 1 MVA or more with option to furnish the security deposit in the form of irrevocable bank guarantee. The FGI in the interest of justice for industries having smaller connections has represented to GERC to reconsider the amendment also in favour of those having contract demand below 1 MVA as the ability of these small industries was much less than industries with 1 MVA or more capacity.

Representation made to GUVNL for Formation of Energy Task Force Committee

The FGI had represented to GUVNL for formation of Energy Task Force Committee to take up power sector related issues for examination and resolving the same. Based on the representation, an Energy Task Force Committee was constituted to deal with the issues. From FGI, the following members have been included to form the Energy Task Force Committee.

  • Shri V M Mehta, Chairperson, electrical and Energy Committee, FGI
  • Smt. Geeta Goradia, President, FGI
  • Shri Amit Patel, Sr. Vice President, FGI
  • Shri Ankur Jain, Executive Director, Ankur Scientific Energy Technologies Pvt. Ltd.

There existed several areas where efficiency of the discoms could be increased. Some issues related to reduction in technical losses. All the issues pointed out by FGI were noted by GUVNL for resolving them.

Representation made to Shri Vajubhai Vala, Hon’ble Finance Minister, Government of Gujarat, requesting for withdrawal of amendment reducing 2% input tax credit

The Hon’ble Finance Minister, Shri Vajubhai Vala had stated that amendment reducing 2% Input Tax Credit was introduced by Gujarat Govt. due to Central Government not compensating the State Government for the reduction in CST to 2%. Since the income of Government of Gujarat from VAT had increased to quite a great extent, ranging upto 36%, the FGI had again taken up with Shri Vajubhai Vala to withdraw the amendment. It has been reiterated to grant the much needed relief to industries which they were really in need of, to meet competition for sustaining their business activities. The FGI was pursuing to get the amendment withdrawn.

FGI representation to provide more flights from city and air links with all metros

The FGI has made a representation to the Union Ministry of Civil Aviation to increase the number of flights from Vadodara and to extend Air Traffic Control watch hours. The FGI has stated that although Vadodara is the nerve centre of all road and railway communications, it severely lacks air links to all major metropolises. Despite a very heavy density of traffic in and around Vadodara – Bharuch, Vidhyanagar, Dahod, Godhra, Anand – the number of flights to and from Vadodara was also minimal.

FGI has highlighted the anomalies regarding the airfare from Vadodara to Mumbai which was five times higher than the airfare from Ahmedabad to Mumbai. [Though Vadodara was the hub of industrial activity, it was not connected by air to other big towns in Gujarat except for Ahmedabad.] In addition to the civil air traffic there are a number of private aircraft belonging to corporate members, which were positioned at Harni airport necessitating having a continuous morning to night watch of ATC at Vadodara Airport.

Representation made to Jet Airways

The Office Bearers has a meeting with Jet Airways officials Mr. Rajkumar Bhattacharya, Manager – Key Accounts and Mr. Harshwardhan Singh Solanki, Assistant Manager – Sales at FGI and following issues were represented for a solution:

  1. Introduction of two additional flights, one in the morning on Delhi-Vadodara-Delhi route and second, Mumbai-Vadodara-Mumbai route in the evening.
  2. Necessity of Intra-Gujarat Flights
  3. Proposal for a corporate concession to FGI members.
  4. To systematize the luggage handling at Vadodara Airport.

The response of the Jet Airways officials was positive.

Representation at the RAC II Central Excise & Customs Meeting

Shri K S Chhabra, nominee of FGI on the committee attended the meeting of RAC – II Commissionerate. The main issue represented was regarding Trade Facility notice number 2/2011 of 14th June 2011. This related to supervision of stuffing and sealing containerized cargo by Field Officers. The suggested procedure in terms of time frame was creating confusion for the exporters and also put additional financial burden. It was assured to FGI that the issue would be taken care of to ensure that it does not have any adverse effect.

Representation made by FGI at the Grievance cell Meeting of the Office of Joint DGFT

Shri Janak Sheth, on behalf of the FGI has been representing issues of members with Grievance Cell of the office of Joint DGFT for appropriate remedy. He has established good rapport with the department and could succeed in obtaining favour of the department to close pending cases of industries with the department up to the year 2008. The FGI had informed members to respond to FGI in the matter to help them to take benefit of the opportunity provided by DGFT to the industries.

Representation made on ‘Direct Tax Code’

Shri Milin Mehta, Chartered Accountant & FGI Consultant had provided to FGI substantive material on Direct Tax Code. Based on these suggestions received the FGI has forwarded detailed representation to Hon’ble Union Finance Minister for consideration while framing the Direct Tax Code.

Representation made to Union Ministry of Finance for taking cognizance of suggestions of FGI on direct and indirect taxation while framing Union Budget Proposals 2012-13

Suggestions received on direct and indirect taxation from members of FGI were forwarded to the Union Ministry of Finance, New Delhi for consideration while finalizing Union Budget proposals 2012-13.

Representation made in matter of petition filed by VMC in Hon’ble High Court of Gujarat demanding contribution from industries towards revamping of the Sewage Treatment Plants (STPs) of the Corporation

The BMC during the year 2000 had sought from 117 industries, a total amount of ` 1129.0 lacs as contribution for revamping of the STPs of the Corporation and further additional amount of contribution beyond the year 2000 for five years to the tune of ` 500 lacks. The above matter came up for hearing in Hon’ble High Court of Gujarat after a long gap of over 10 years. The FGI on behalf of industries has represented following issues before the Hon’ble High Court relating to the Corporation:

  • For inclusion of all the parties / units (Approx. 3000 units)
  • Payment of contribution, by installment in 3 years
  • Parties who have paid 1% of their turnover to be allowed set off for the amount paid against amount claimed.
  • The revision of effluent norms
  • Relief to closed units from such contribution

Subsequently, a detailed civil application was filed by FGI Advocate – Nanavati & Associates before the Hon’ble High Court taking up all minor and major issues.

Representation made at the Trade Facilitation Committee Meeting organized by Customs Commissionerate at Ahmedabad

FGI had represented to the customs department regarding delay in clearance of goods booked by airways, as the customs authorities at Ahmedabad Airport did not clear the cargo until the draft was encashed by their nominated bank - Bank of Baroda. The point was put on agenda for discussion in the meeting which was attended by FGI representative, Shri Janak Sheth. The Customs Commissionerate, Ahmedabad had taken up the issue with Customs authority at Ahmedabad Airport for resolving the same.

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