TIMES NEWS NETWORK

NEW DELHI: Indian industry representatives have come out strongly against the government’s move to issue an ordinance that effectively over-rules SC verdict that favoured ITC in an excise dispute case.

They said the move would undermine the confidence of the industry and make a dent in the environment of faith that had been created between the government and the industry over the past few years. They have urged the government to review the ordinance urgently.

CII president Sunil Kant Munjal said the ordinance would have a "negative impact on industry morale." He said it would have been more appropriate for the government to have waited for its review petition to be heard in the Supreme Court — a move that would have been in keeping with according high respect to the judicial process. "The ordinance will lead to insecurity within the industry, especially in the minds of domestic and foreign investors," said Munjal.

Assocham president Mahendra K Sanghi said that it was unfortunate on the part of the government to have "adopted the retrospective legislation route to negate the Rs 803 crore excise relief that was granted to the company."

PHDCCI president KN Memani said the government should explore new avenues for taxation and its methods should be "fair, logical and transparent." He said that changing the concept of retailing with retrospective effect—after the Supreme Court verdict — brings uncertainty to the business environment and sends out negative signals.

But even as the industry expressed serious concerns over the ordinance, the government asked ITC to pay additional Rs 450 crore, following the ordinance that changes the definition of retail price.

ITC has been asked to pay the amount, failing which a penalty of 15% would be charged from the company, according to official sources.

The long pending case pertained to the alleged excise evasion of around Rs 800 crore by the tobacco major ITC. It had paid around Rs 350 crore but the court ruled in ITC’s favour. The government however brought out an Ordinance that goes against the ruling and has demanded the balance Rs 450 crore from the company.