Extension of industrial incentives

10/10/2017

Centre has extended industrial incentives to the Jammu and Kashmir 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 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 NirmalaSitharaman had assured to come out with an alternate scheme to help industry in hilly and North Eastern States. 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.
An official notification on the Scheme issued by Union Ministry of Commerce and Industry, 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. 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. 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. 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.

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