Cabinet approves Scheme of Budgetary Support under GST Regime to the eligible units - 16 August 2017

Cabinet approves Scheme of Budgetary Support under GST Regime to the eligible units located in States of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim 

The Cabinet Committee on Economic  Affairs chaired by the Prime Minister Shri Narendra Modi today has given its approval to the Scheme of providing Budgetary Support under Goods and Service Tax Regime for the eligible industrial units located in State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim.  Budgetary support of Rs. 27,413 crore for the said Scheme has been approved for the period from 1.7.2017 till 31.03.2027 for such industrial units located in aforesaid States which availed the benefit of Central Excise exemption prior to coming into force of GST regime.

The Government of India was implementing North East Industrial and Investment Promotion Policy (NEIIPP), 2007 for North Eastern States including Sikkim and Package for Special Category States for Jammu & Kashmir, Uttarakhand and Himachal Pradesh to promote industrialization.  One of the benefits of the NEIIPP, 2007 and Package for Special Category States was excise duty exemption for first 10 years after commencement of commercial production.

Upon repeal of the Central Excise duty laws, the Government has decided to refund the central share of CGST and IGST to the affected eligible industrial units for the residual period in the States of North Eastern region and Himalayan States.  DIPP will notify the Scheme, including detailed operational guidelines for implementation of the scheme within 6 weeks. 

It is estimated that total number of 4284 eligible units located in these States will be benefitted from the above scheme.

Source : http://pib.nic.in/newsite/erelease.aspx?relid=0

>Some major points are worth to be noted below :

## The budget which has been approved above will be used only for those Industrial Units which already have started availing benefits of 10 years Excise exemption in its first 10 years of operations,

## NEIIPP was used earlier in the pre-GST regime which included Industrial Units in the areas of -

- Jammu & kashmir,
- Sikkim,
- Uttarakhand,
- Himachal Pradesh,
- certain other NE states,

## The budget purely will provide a benefit to the existing units and hence benefit of location related exemptions will NO longer be available in GST era as that was one of the objective of the GST to have common rate of tax across India,

## CGST  will be refunded in full AND portion of central tax in IGST will also be refunded,

## Refund related to SGST and a portion of state tax in IGST will be decided by respective states by issuing their own notifications if they wish to,

## Only the residual portion which is remaining out of 10 years will be covered under this budget,

## The benefit will be available from 01 July 2017 upon issuing of formal guidelines in this regards which are likely to be out within next 6 weeks,

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