The Department of Industrial Policy and Promotion (DIPP) has, last day notified the guidelines for the excise free zone scheme for eligible manufacturing units in Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim. Companies who have units operating in these states will get reimbursement of 58% on the Central Goods and Service Tax.
Area-based programmes allow businesses in special-category states with a low industrial base, such as Himachal Pradesh, Uttarakhand, and the seven states of the Northeast, exemptions from the payment of central taxes such as excise duty and some other state levies.
“The new scheme is offered, as a measure of goodwill, only to the units which were eligible for drawing benefits under the earlier excise duty exemption/refund schemes but has otherwise no relation to the erstwhile schemes,” the DIPP notification said.
Budgetary support of Rs. 27,413 crore for the scheme has been approved for a ten year period starting from the date of GST implementation July 1, 2017 to March 31, 2027. Cabinet had approved the scheme in August this year.
This is on the recommendation of the GST Council after its meeting on September 30, 2016 where it was decided that exemption from payment of indirect tax under the old tax incentive scheme of Central or State Governments shall not continue under the GST regime. The Council, further directed the Government to notify schemes of budgetary support to such units.
The Notification clarified that “Units which were eligible under the erstwhile Schemes and were in operation through exemption notifications issued by the Department of Revenue in the Ministry of Finance, as listed under para 2 below would be considered eligible under this scheme. All such notifications have ceased to apply w.e.f. 01.07.2017 and stands rescinded on 18.07.2017 vide notification no. 21/2017 dated 18.07.2017. The scheme shall be limited to the tax which accrues to the Central Government under Central Goods and Service Act, 2017 and Integrated Goods and Services Act, 2017, after devolution of the Central tax or the Integrated tax to the States, in terms of Article 270 of the Constitution.”
“Any unit which is found on investigation to over-state its production or make any misdeclaration to claim budgetary support would be made in-eligible for the residual period and be liable to recovery of excess budgetary support paid,” the notification said.
Read the full text of the Notification below.
