Excelsior Correspondent
JAMMU, Aug 16: In a significant decision, the Union Cabinet today extended incentives to industry in Jammu and Kashmir and other Himalayan and North Eastern States, which, otherwise, had ceased to exist after the implementation of Goods and Services Tax (GST) in the entire country.
Official sources told the Excelsior that the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi today approved the Scheme of providing budgetary support under GST regime for eligible industrial units in Jammu and Kashmir along with other States.
“The industrial incentives have been extended for a period of 10 years with effect from July 1, 2017 to March 31, 2027 for the industrial units, which were located in Jammu and Kashmir and other States, which availed the benefit of Central Excise exemption prior to implementation of the GST,’’ sources said.
The Cabinet approved budgetary support of Rs 27,413 crore for the industrial incentive scheme, they added.
Other States, where the industrial incentives have been extended included Uttarakhand and Himachal Pradesh, the two falling in Himalayan State category and all North Eastern States including Sikkim.
Finance Minister Arun Jaitley also made an announcement to this effect in New Delhi after the CCEA meeting.
He said industries in Jammu and Kashmir and other Himalayan and North Eastern States will continue to get tax exemption till March 2027, albeit as refund, under the current GST regime which was rolled out on July 1.
“Within the framework of the GST Act each industry will be entitled to its own refund mechanism during this particular period (March 31, 2027),” he said.
Sources said the Central support shall be available for the residual period (10 years from the date of the commercial production) in the States of North Eastern region and Himalayan States.
Industries and Commerce Minister Chander Prakash Ganga, while hailing the extension of industrial incentives, said he took up the issue regularly with Union Finance Minister Arun Jaitley and Union Minister for Commerce Nirmala Sitharaman and the issue has finally been settled with the Cabinet extending the industrial incentives.
DIPP will notify the scheme, including detailed operational guidelines for its implementation within 6 weeks, they added.
Under the new GST regime, there is no provision for exemption but there is one section under the Act which permits refunds.
“Therefore, refund would be permitted through DBT. The sunset clause of these exemptions has been extended to 2027. About 4,284 industrial establishments were entitled to this benefit,” sources said.
The Centre was implementing North East Industrial and Investment Promotion Policy (NEIIPP), 2007 for North Eastern States including Sikkim and Package for Special Category States for Jammu & Kashmir, Uttarakhand and Himachal Pradesh to promote industrialization.
One of the benefits of the NEIIPP, 2007 and Package for Special Category States was excise duty exemption for first 10 years after commencement of commercial production.
Upon repeal of the Central Excise duty laws, the Government has decided to pay a budgetary support equal to the Central share of the cash component of Central GST and Integrated GST paid by the affected eligible industrial units.
Meanwhile, Chief Minister, Mehbooba Mufti has welcomed the extension in tax exemption announced today by the Centre for the industries in Jammu and Kashmir.
She said the extension in tax exemption would go a long way in promoting industrial growth and economic development in the State.
Mehbooba specially thanked Prime Minister Narendra Modi and Union Finance Minister, Arun Jaitley for having taken personal and keen interest in ensuring continuation of tax exemption to the industries in Jammu and Kashmir for another 10 years.
Meanwhile, Minister for Finance Dr Haseeb Drabu has also welcomed the extension in tax exemption for the industries in Jammu and Kashmir, which, he said, would be paid as a refund under the present Goods and Services Tax (GST) regime.
Hailing the Centre’s decision, Dr Drabu said the State Government would within the next fortnight work out the exact modalities and incentive structure that will benefit local industry, investors and consumers. “The new incentive structure will protect the local industry and benefit local customers,” he said.
He said the State Government, under Chief Minister Mehbooba Mufti, is committed to incentivize the industries but the tax and fiscal incentives should be given in such a manner that it promotes greater employment and higher value addition.
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