On August 16, 2017, Cabinet Committee on Economic Affairs chaired by the Prime Minister Narendra Modi has given its approval to the Scheme of providing Budgetary Support under Goods and Service Tax (GST) Regime for the eligible industrial units located in State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim.
GST Relief Beneficiaries:
- 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.
- It is estimated that total number of 4284 eligible units located in the State(s) of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim will benefit from the above scheme.
Rationale for Providing GST Relief:
- 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 pay a budgetary support equal to the central share of the cash component of Central Goods and Services Tax (CGST) and Integrated Goods and Service Tax (IGST) paid by the affected eligible industrial units.
Quick Facts about Goods and Services Tax (GST):
- The GST is a destination-based, single indirect tax that is levied on consumption of goods or use of services across India.
- It was rolled out in India from July 1, 2017.
- GST replaced 16 levies (7 central taxes and 9 state taxes), consequentially creating India as one market with one tax rate.
- Goods and Services Tax (GST) Council headed by Union Finance MinisterArun Jaitley and comprising representatives of all states have finalised four tax brackets under GST viz. 5%, 12%, 18% and 28%.