Schemes to have retrospective effect from July 2017
JAMMU, Dec 22: The Finance Department of Jammu and Kashmir Government today announced budgetary support for eligible manufacturing units in Jammu and Kashmir. The support is in the shape of 100 per cent re-imbursement of the State Tax paid (SGST) after utilization of the Input Tax Credit (ITC).
The Finance Department today issued two SROs to this effect bearing Nos. 519 and 521.
The Government Orders said the State would reimburse 42 per cent of the Central Tax paid (CGST) in addition to 58 per cent reimbursed by the Central Government under its existing scheme, after utilization of the Input Tax Credit under Jammu and Kashmir Goods and Services Tax Act, 2017.
The scheme would be applicable to existing eligible manufacturing units operating in the State, registered under erstwhile schemes of the Central Excise Nos. 56/2002-CE, 57/2002-CE and 01/2010-CE.
The support is in the shape of 100 per cent reimbursement of the State Tax paid (SGST) after utilization of the input tax credit. However, incentives for such units, which were not registered with the Central schemes or went not availing benefit of these schemes, will be taken up in the coming budget.
Through SRO 519, the Government notified ‘J&K Reimbursement of State Taxes for promotion of industries in the State’ Scheme while in the SRO 521, it notified the scheme ‘J&K Reimbursement of Central Taxes for promotion of industries in the State.’
Significantly, benefits of both the Schemes will be available to only those industrial units which provide employment to permanent residents of Jammu and Kashmir as per guidelines of Industrial Policy 2016.
“The Government, in order to provide budgetary support to the existing eligible manufacturing units operating in the State, notified the scheme for providing budgetary support to the manufacturing units in the shape of 42 per cent Central Tax paid under Central Goods and Services Act 2017 after adjustment of input tax credit,” the SRO 521 said.
It said the State Government would provide budgetary support to the eligible units by way of reimbursement of 42 per cent of Central Tax paid through debit in the cash ledger account maintained by the Unit under Goods and Services Tax Act.
Named as ‘Jammu and Kashmir Reimbursement of State Taxes and Central Taxes for Promotion of Industries in Jammu and Kashmir’, the two Schemes will come into operation with effect from 8.7.2017 for an eligible unit and will remain in force till the scheme namely “Budgetary Support under GST regime to the Industrial Units located in State of J&K, Uttarakhand, Himachal Pradesh and North East including Sikkim”, announced by the Centre on October 5, 2017, is in operation.
“To avail benefit of these Schemes, eligible unit shall first utilize Input Tax Credit of State tax and Integrated tax besides Central Tax and Integrated Tax and balance of liability, if any, shall be paid in cash and where this condition is not fulfilled, the reimbursement sanctioning officer will reduce the amount of reimbursement payable to the extent credit of State Tax and Integrated Tax apart from Central Tax and Integrated Tax, is not utilized for payment of taxes,’” the SROs read.
It said reimbursement under the Schemes will be worked out on quarterly basis for which claims will be filed on a quarterly basis including January to March, April to June, July to September and October to December. “The reimbursement will be made only after verification and clearance of the claim for 58 per cent under Central Scheme and 42 per cent under State Scheme to the industrial unit”.
“Any unit, which is found on investigation to over-state its production or make any mis-declaration to claim reimbursement would be made ineligible for the scheme and held liable for recovery of excess reimbursement paid to the industrial unit, if any. Activity relating to concealment of Input Tax Credit, purchase of inputs from unregistered suppliers (unless specifically exempt from GST registration) or routing of third party production or other activities aimed at enhancing the amount of reimbursement by mis-declaration would be treated as fraudulent activity and, without prejudice to any other action under law may invite denial of benefit under the scheme ab-initio. The units will have to declare total procurement of inputs from unregistered suppliers and from suppliers working under Composition Scheme under Jammu and Kashmir Goods and Services Tax Act, 2017,” the Finance Department SROs said.
However, the grant of reimbursement under the scheme shall be subject to compliance of provisions related to any other law in force.
The manufacturers applying for benefits under the Schemes, for the first time, will have to file a set of documents mentioned in the SRO.
“In cases where an entity is carrying out its operations in the State from multiple business premises, in addition to manufacture of specified goods by the eligible unit, under the same GST Identification Number (GSTIN), the eligible unit will submit claim for reimbursement of budgetary support providing receipt of inputs, input tax credit involved on the inputs or capital goods received by the eligible unit and quantity of specified goods manufactured by the eligible unit vis-a-vis the inputs, input tax credit availed by the registrant under the given GSTIN,” the SROs said.
They added that under GST, one business entity having multiple business premises would generally have one registration in the State in such situations where inputs are received from another business premises (of supplying unit) of the same registrant (GSTIN), the details of input tax credit of State Tax availed by the supplying unit for supplies to the eligible unit shall also be submitted duly certified along with the claim
“The Schemes will be available to only those industrial units who provide employment to permanent residents of the State of Jammu and Kashmir as per guidelines of Industrial Policy 2016,” the SROs stated.
They said the industrial units making purchases partly from the persons operating under Composition Scheme under Section 10 of the Jammu and Kashmir Goods and Services Tax Act, 2017 and / or from unregistered persons will submit details of such inputs. The reimbursement to such industrial units will be in proportion to the inputs purchased from the registered dealers after adjustment of the input tax credit.
The reimbursement under the twin Schemes, however, will be subject to an inspection by a team constituted by Commissioner Commercial Taxes. The inspection report will be made available to the jurisdictional Assistant Commissioner/ State Tax Officer before sanction of the reimbursement. The amount will be released only after the findings to these teams are available. If there is delay in findings of the inspection, the Assistant Commissioner /State Tax Officer of State Taxes may sanction provisional reimbursement to the eligible unit. Such provisional reimbursement will not continue beyond a period of six months, the SROs said.
On manner of budgetary support to the industrial units, the SROs read: “the manufacturer will file an application for reimbursement for the Tax paid in cash, other than the amount of Tax paid by utilization of Input Tax credit under the Jammu and Kashmir Goods and Services Tax Rules 2017.
“The concerned Nodal Officer will credit the GST amount in the declared bank accounts of the industrial units referred to in the information forwarded by respective Additional Commissioners within seven days of receipt of consolidated information from the concerned Additional Commissioner,” the Government orders mentioned.
The SRO cautioned that if any amount under the Schemes is availed by wrong declaration of particulars regarding meeting the eligibility conditions in this scheme, necessary action would be initiated and concluded in the individual case by the Office of concerned Assistant Commissioner or State Tax Officer of State Taxes.
“That the industrial unit failing to intimate the Department any change in its constitution, bank account, line of activity, and title of the firm within the time allowed will not be eligible for reimbursement of taxes for the period in which he fails to intimate the Department,” it said.
The SROs outlined procedure for recovery.
“Where any amount is recoverable from a unit, the Assistant Commissioner or State Tax Officer of State Tax, as the case may be, will issue a demand note to the unit intimating the amount recoverable from the unit and the date from which interest thereon is due and directing the manufacturer to deposit the full sum within 30 days of the issue of the demand note in the account head of State Taxes and submit proof of deposit to them,” it said.
Upon cessation of the two Schemes, the unpaid claims will be settled in accordance with the provisions (of the Schemes) while the recovery and dispute resolution mechanisms will be continue to be in force.