Procedure for manual disbursal of budgetary support under the Goods and Service Tax Regime

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Wednesday, December 12, 2018

Dear all,

Your association SIMA is forwarding herewith Circular No.1060/9/2017-CX Dated 27th November 2017. This circular has been issued by Govt. of India, Ministry of Finance, Dept. of Revenue, New Delhi.

Vide the said circular it is informed that under the central excise regime as is existed prior to 1/7/2017 the units located in the states of Jammu & Kashmir, Uttarakhand, Himachal Pradesh, and North East including Sikkim were eligible to avail exemption from payment of Central Excise duty in terms of area-based exemption notifications. While ab-initio exemption was available to the unit located in other aforesaid areas were required to pay Central Excise duty and avail exemption by way of refund of cash component of such duty paid.

Under GST regime there is no such exemption and the existing units which were availing exemption from payment of Central Excise duty prior to 01.07.2017 are required to pay CGST&SGST/IGST like a normal unit. Thus, presently no exemption is available to these units by way either ab-initio exemption or by way of refund.

In order to obviate the hardships faced by such units, Central Government has decided to provide budgetary support to the eligible units which were operating under erstwhile Area Based Exemption Schemes, for the residual period for which the units would have operated under the schemes, by way of refund of the Goods and Service tax, limited to its share of CGST and/or IGST retained after devolution of taxes to the states. In this regard Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry which is the administrative department for the scheme, has issued a notification dared 05.10.2017 regarding "Scheme of budgetary support under Goods and Sevice Tax Regime to the units located in States of Jammu & Kashmir, Uttrakhand, Himachal Pradesh and North East including Sikkim." The Gazette copy of the scheme, issued on 11.10.2017, can be accessed from website www.e-gazette.nic.in under Ministry of Commerce and Industry. The new scheme is introduced as a measure of goodwill, only to the units which were eligible for availing benefits under the earlier excise duty exemption/refund schemes but has otherwise no relation to the erstwhile schemes. The scheme of budgetary support has come into operation w.e.f. 01.07.2017 for an eligible unit (as defined under para 4.1 of the scheme)and shall remain in operation for residual period (as defined in para 4.3 of the scheme) in respect of specified goods (as defined in para 4.2 of the scheme). Budgetary support under the scheme shall be worked on a quarterly basis and claims for the same shall also be filed on a quarterly basic viz. April to June, July to September, October to December and January to March. The manner and method for determined of amount of Budgetary Support, recovery procedure thereof etc has been enumerated in the scheme.

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Thanking you,

With regards,

For Silvassa Industries & Manufacturers Association,

Narendra Trivedi,

Secretary