FNCCI seeks electricity VAT rollback, warns of rising business costs
Summary
FNCCI has urged the government to withdraw VAT on electricity tariffs, saying the tax is raising production costs, squeezing cash flow and weakening business competitiveness. The federation warns the burden could slow investment, industrial expansion and job creation unless the policy is reviewed.
Key Points
- FNCCI says the new VAT on electricity is increasing production costs for industrial, commercial and tourism businesses.
- The federation argues many firms cannot fully or immediately claim input tax credits because of refund and adjustment procedures.
- FNCCI warns higher energy costs could hurt investment, expansion and employment, and eventually be passed on to consumers.
- The organization has asked the government to consult the private sector and ensure a simpler VAT refund system.
