Will boost growth, exports, employment: Prabhu
Sanjeev Pargal
JAMMU, Oct 8: The Centre has conceded the demand of Jammu and Kashmir for extending industrial incentives to the State for a period of 10 years, which had, otherwise, stopped after implementation of Goods and Services Tax (GST) as Excise Duty had ceased to exist in the new tax regime.
Union Minister for Industry and Commerce Suresh Prabhu today announced the new scheme extending budgetary support worth Rs 27,413 crores as industrial incentives to the hilly States of Jammu and Kashmir, Himachal Pradesh, Uttarakhand and North East including Sikkim.
This is the first major incentive to industrial sector of Jammu and Kashmir and other States after implementation of the GST. Concerns had been raised by the Jammu and Kashmir Government as well as industrialists that after Excise Duty ceased to exist in new GST regime, the exemptions extended to them under the Duty will end. However, the then Industry and Commerce Minister Nirmala Sitharaman had assured to come out with an alternate scheme to help industry in hilly and North Eastern States.
“The new Scheme will help the States, which are very important for us, for their future development needs. We are responsive to industry’s concerns and shall work together to boost growth, exports and employment in these States,” Prabhu said while announcing the new scheme.
Asserting that new scheme was offered as a measure of goodwill to units eligible for development benefits under Excise Duty exemption/refund scheme, the Union Minister for Industry and Commerce said his Ministry has recognized industrial concerns on withdrawals of exemption and came out with budgetary support worth Rs 27,413 crores for residual period as part of a re-imbursement of GST period.
Sources told the Excelsior that the new incentive scheme for the industry would last 10 years i.e. till 2027.
An official notification on the Scheme issued by Union Ministry of Commerce and Industry, which is in possession of the Excelsior, said: “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 had otherwise no relation to the erstwhile schemes.
“Units which were eligible under the erstwhile scheme and were in operation through exemption notifications issued by the Department of Revenue in the Ministry of Finance will be eligible under the new scheme. The scheme shall be limited to the tax which accrues to the Central Government under Central Goods and Service Tax Act and Integrated Goods and Services Act after devolution of the Central tax or the Integrated tax to the States, in terms of Article 270 of the Constitution”.
The new Policy states that to avail benefit of the scheme, eligible unit will first utilize input tax credit of Central tax and Integrated tax and balance of liability, if any, shall be paid in cash and where the condition is not fulfilled, the re-imbursement sanctioning officer shall reduce the amount of budgetary support payable to the extent credit of Central tax and Integrated tax, is not utilized for payment of tax.
“Notwithstanding the rescinding of exemption notifications, the limitations, conditions and prohibitions under the respective notifications issued by the Department of Revenue, as they existed before 1.7.2017, would continue to be applicable under this scheme. However, the provisions related to facility of determination of special rate under the respective exemption notifications would not apply,” the Notification said.
It added that budgetary support under the scheme will be worked out on quarterly basis for which claims shall also be filed on quarterly basis.
“Any Unit, which is found on investigation to over-state its production or make any mis-declaration to claim budgetary support would be made ineligible for the residual period and be liable to recovery of excess budgetary support paid. Activity related to concealment of input tax credit, purchase of inputs from unregistered suppliers (unless specifically exempt from GST registration) or routing of this party production or other activities aimed at enhancing the amount of budgetary support by mis-declaration would be treated as fraudulent activity and, without prejudice to any other action under lay may invite denial of benefits under the scheme ab-initio. The units will have to declared total procurement of inputs from unregistered supplies and from suppliers working under Composition Scheme under CGST Act.
The scheme would provide budgetary support amounting to Rs 27,413 crore for 4,284 industrial establishments in these States as tax exemptions till March 2027.
“Within the framework of the GST Act, each such industrial units located in these States which availed the benefit of Central Excise exemption prior to coming into force of GST regime, will be entitled to its own refund mechanism during the period from July 01, 2017 to 31 March, 2027,” sources said.
Before the implementation of GST, the Centre was implementing a special package for Jammu & Kashmir as amended from time to time, to promote industrialization, which, among other benefits, included Excise Duty exemption for first 10 years after commencement of commercial production.
Minister of State in the Prime Minister’s Office, Dr Jitendra Singh had taken up the extension of industrial benefits to Jammu and Kashmir and North Eastern States, whose charge he holds independently, with the Union Ministry of Industry and Commerce for benefit of the industry.
Dr Jitendra Singh hoped that with the announcement of new scheme, industry would flourish in Jammu and Kashmir, other hilly States and North East.
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