Proposal to wind up Govt Employees’ Welfare Corpn
STATE GOVT DID SEND A PROPOSAL TO GST COUNCIL, URGING IT TO ALLOW THE CORPN TO SELL TAX-FREE GOODS TO GOVT STAFF AND PENSIONERS, BUT IT WAS TURNED DOWN.
LUCKNOW : The fate of around 500 personnel of the Uttar Pradesh Government Employees’ Welfare Corporation hangs in the balance with the management having recommended permanent shutdown of the 57-year-old organization that has not been able to pay salaries to the staff since 2017, people aware of the development revealed.
Though the state government, according to them, is yet to take a final call on the recommendation, there is little chance left for the survival of the corporation as all the revival bids in the past have come a cropper.
Besides, the government has refused to give any financial assistance to it.
“The UP Government Employees’ Welfare Corporation management has sent a proposal to the state government, recommending winding up of the corporation after the government asked them to mobilize resources on their own to keep the corporation alive,” said an official requesting anonymity.
“Chief secretary DS Mishra held a high-level meeting on May 19 to discuss the recommendation for the shutdown of the corporation, but the decision is yet to be taken,” he added.
Set up as a registered society in 1965, the corporation was mandated to sell consumer items of daily use to government employees and pensioners through its own depots ( stores) at a price lower than the market price because such goods remained exempted from sales tax/ VAT. But a countdown to its end began after the Goods and Services Tax ( GST) regime came into force in the country and the state in July 2017.
The GST Act did away with the provision whereby the state government allowed the welfare corporation exemptions from VAT on the commodities it sold to government staff and pensioners through its 160 depots across the state.
The state government did send a proposal to the GST Council, urging it to allow the corporation to sell tax- free goods to government staff and pensioners, but it was turned down.
“As the goods sold through the corporation’s depots ceased to be tax free, employees had no incentive to buy goods from there and this cut the depot’s business drastically after the GST came in 2017,” another official pointed out.
“Barring three Ghaziabad depots that are able to earn enough to pay salaries to the staff, all other depots (now 98 operative) are in losses,” he added.
The corporation, according to him, needs an amount of Rs 23 crore annually to meet expenditures towards salary, pension etc.
“But the corporation has not been able to disburse salaries and pension to the staff for last five years with the cumulative liabilities reaching more than Rs 110 crore by now,” he said. “In the meantime, many employees have approached courts that have directed the corporation to disburse salaries in many cases. Unable to comply with the orders, the corporation is facing 200 cases, including contempt cases,” the official said.