Directions issued for nullifying impact of erstwhile CST
Mohinder Verma
JAMMU, Oct 26: In a major decision aimed at providing respite to the industrialists, the State Government has approved tax incentives for industry sector and a detailed notification specifying the eligibility and mode of disbursement will be issued in next few days. Moreover, the Government of India has agreed to further extend non-tax incentives under Industrial Development Scheme for Jammu and Kashmir till 2020.
Official sources told EXCELSIOR that ever since the implementation of Goods and Service Tax (GST) in Jammu and Kashmir, serious concern was being expressed by the industrialists that after Excise Duty ceased to exist under new tax regime, the exemptions extended to them under the duty will end and this would have adverse impact on the industries.
The industrialists raised this issue at different forums in the State Government and even sought the intervention of Chief Minister Mehbooba Mufti. Finding the concern of the industrialists as genuine, the Department of Industries and Commerce started putting pressure on the Finance Department for granting tax incentives to the industry sector under new tax regime.
After several rounds of discussions, the Finance Department prepared a proposal and placed the same before the State Cabinet, which on October 23, 2017 held detailed deliberations on the same. Finally, the Cabinet vide its Decision No.199/12/2017 put seal of approval on J&K GST Budgetary Support Scheme.
“The Cabinet has decided reimbursement of remaining 42% of the Budgetary Support Scheme of the Union to the units located in the State till the period the Union Scheme is valid”, reads the Decision No.188/12/2017, the copy of which is available with EXCELSIOR.
The Cabinet has also decided reimbursement of 100% of SGST paid by the eligible units after utilization of input tax credit and the Finance Department has been asked to issue a detailed notification specifying the eligibility and mode of disbursement, which is likely in next some days.
Moreover, the Cabinet has directed the Finance Department to consider making an allocation in the next year’s budget to nullify the impact of erstwhile Central Sales Tax (CST) for industries in Jammu and Kashmir, sources informed.
It is pertinent to mention here that the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi had on August 16, 2017 given nod to the scheme for providing Budgetary Support under Goods and Service Tax regime for the eligible industrial units located in J&K, Uttarakhand, Himachal Pradesh and North Eastern States.
The Scheme has been approved for the period from July 1, 2017 till March 31, 2027 for such industrial units located in these States which availed the benefit of Central Excise exemption prior to the coming into force of GST Regime.
Meanwhile, Government of India has agreed to extend the Industrial Development Scheme for J&K with effect from June 15, 2017, when the earlier scheme had expired, to March 31, 2020.
“All new industrial units in manufacturing sector and services sector located in J&K will be eligible for incentives under the scheme”, sources said while disclosing that notification in this regard is likely to be issued by the Government of India shortly.
“All eligible industrial units, which were getting benefits of one or more components of this present scheme under other schemes of the Government of India will also be considered for providing benefits of other components of this scheme subject to fulfillment of the scheme guidelines”, sources said.
As far as Central Capital Investment Incentive for access to credit is concerned, all the eligible new industrial units in the manufacturing and service sectors located anywhere in J&K will be provided Central Capital Investment Incentive for access to credit at the rate of 20% of the eligible investment in plant and machinery with an upper limit of Rs 5 crore.
Similarly, under Central Interest Subsidy all the eligible new industrial units will be given an interest subsidy at the rate of 3% and it will be on the working capital credit advanced by the scheduled banks or Central/State financial institutions, sources said, adding for the purpose of this scheme the working capital requirement of a unit shall be capped at 25% of their annual turnover.
Moreover, under Central Comprehensive Insurance Subsidy, all the eligible new industrial units located anywhere in J&K will be eligible for reimbursement of 100% insurance premium for insurance of premises and Plant and Machinery.
Follow our WhatsApp channel