Procedure
for Manual Disbursal of Budgetary Support under GST Regime to the units located
in States of J&K, Uttarakhand, Himachal Pradesh
and North East including Sikkim
[Ref: Circular No. 1060/9/2017-CX dated 27 November 2017]
Subject: Procedure for manual disbursal of budgetary
support under Goods and Service Tax Regime to the units located
in States of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and
North East including Sikkim.
As you are
aware, under the Central Excise regime as its existed prior to 01.07.2017, 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 units located in the States of Uttarakhand
and Himachal Pradesh, the units 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.
2. 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 of either ab-initio exemption or by way of refund.
3. 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
Services 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 (DIPPL Ministry of Commerce
& Industry which is the administrative department
for the scheme, has issued a notification dated 05.10.2017 regarding "Scheme of budgetary support under Goods and Service 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 4.1of 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 out on quarterly basis and claims for the same shall also be filed on
a quarterly
basis viz. April to June, July to September, October
to December and January to March. The manner and method for determination
of amount of Budgetary Support, recovery procedure thereof etc
has been enumerated in the scheme.
4. The amount of such budgetary
support under the scheme for specified goods manufactured by the eligible units shall be determined
in terms of para
5 of the scheme and shall be the sum
total of (i) 58% of the Central tax paid through debit in the cash ledger account maintained
by the units in terms
of sub-section(1)
of section
49 the Central
Goods and Services Act, 2017 and (ii) 29% of the integrated tax paid through debit in the cash ledger account
maintained
by the units in terms of section 20 of the Integrated Goods and Services
Act, 2017. However,
where inputs are
procured
from a registered
person operating
under Composition Scheme under Section 10 of the Central Goods and Services
Act, 2017 the amount i.e. sum total of (i) & (ii) above shall be reduced by the same percentage
as is the percentage
value of inputs procured
under Composition scheme out of the total value of inputs.
5. The budgetary
support
shall be disbursed
from the budgetary
allocation
of DIPP, which shall further
allocate
to PAO,
CBEC for its disposal. The eligible unit is required to obtain one time registration and file an
application for payment
of budgetary support. The application shall be processed by the Deputy/Assistant
Commissioner of the Central Taxes for sanction of the admissible amount. The sanctioned amount shall be credited
into bank accounts
of the beneficiaries
through PFMS platform of the Central Government.
6. The claim
for the quarter ending September, 2017 has already become due. In order to mitigate
the difficulties of the eligible units, it has been decided that units would be registered on
the basis of application filed by them manually and application for claim of budgetary
support for the said quarter would also be filed and processed manually.
The approval of the registration for the scheme and processing
of the application for budgetary support for the quarter shall also be
undertaken
manually
by the jurisdictional
Deputy Commissioner/Assistant Commissioner of the Central Tax. The sanctioned amount shall be credited
into the
bank
accounts of the beneficiaries through the PFMS platform in a manner fully compliant
with the direct transfer
of the benefit to the account of the assessee.
7. The standard
operating procedure for the claims relating to the first quarter ending September,
2017 shall
be as per para 8 to para 9 below.
8. Registration
of the eligible units under the scheme
(i) The application
for registration
under
the scheme by the
eligible units shall be submitted in triplicate in the format attached to this circular.
The application shall be signed by the proprietor/partner/managing
director of the eligible unit or by the person authorized by him in this
behalf and supported by the self-authenticated copies of the documents in support
of information as per the application. The registration under
GST is a necessary
pre-requisite
for the scheme.
(ii) In case more than one eligible unit is
operating under the same GSTIN, separate registration is required to be obtained
for each of
the eligible
units.
(iii) The jurisdictional Deputy Commissioner/Assistant
Commissioner of
the Central Taxes would examine the application in terms
of the scheme as notified
on the basis of documents submitted along with the application for registration.
(iv) A unique ID for each of the eligible
units shall be allotted
after registration and ID shall be indicated in the following manner: - sl.no./ name of Central Tax Division/name of Commissionerate/GSTIN. The ID shall
be endorsed
on all the three
copies of the application.
(v) It shall be ensured
by the jurisdictional
Divisional Officer
that record of
registration is maintained against the sl.no. which
is part of
the unique
ID.
(vi) The second copy of the application after
registration of the eligible unit under an official communication shall be forwarded
to the
DDO of the Division for registration of the unit under PFMS. This would
ensure validation of the Bank Account details of the beneficiary. This exercise
should be completed within 3 days of receipt of the copy of application
by the DDO.
(vii) The third copy of the application after registration shall
be forwarded to the ADG, DG Audit, Delhi who in turn
would be providing the details to programme division
(PD) of DIPP in a compiled manner. The DIPP on the basis of these details
shall draw a programme for inspection of the eligible
unit by a team constituted by them. Jurisdictional Commissionerate
of CGST shall provide necessary assistance in carrying out
the inspection. Immediately after completion of inspection a copy of Inspection
report would be forwarded to the Assistant/Deputy Commissioner having jurisdiction
over the eligible unit.
9.
Submission of application for budgetary support by the
eligible unit for quarter ending September, 2017 and its sanction
(i) An eligible unit
after allotment of the Unique ID may file an application for claiming budgetary
support
under
the provisions of para 5.7 of the scheme in the format attached
to this circular. The application
shall be filed
by the
eligible unit only after return for the quarter has been filed and
tax as per
return is paid.
(ii) Once application is filed, duly supported
by the prescribed
document, the same shall be processed for sanction.
The claim
shall be sanctioned after verification of the tax paid by the eligible unit. The details
relating
to tax payment
in cash and input tax credit availed, utilized including
purchases
made from a composition dealer during the quarter shall be available in the GST
returns
of the taxpayer, which are available on the CBEC GST Application for verification
of the application for the budgetary support filed by the
unit. The closing balance of
the credit after end of the quarter shall also be provided for verification by
the Assistant/Deputy
Commissioner.
(iii) In cases where an entity is carrying out its
operations in a
State from multiple business premises, in addition to manufacture of specified goods by the eligible
unit, under
the same GSTIN as that of the eligible unit, the application for budgetary support
shall be supported by additional information duly certified by a Chartered Accountant, relating
to receipt of inputs( receipt from composition dealer to
be indicated separately),
input tax credit involved on the inputs or capital goods received by the
eligible unit and the quantity of specified goods manufactured by the eligible
unit vis-a-vis the
inputs, input
tax credit
availed and specified goods supplied by the registrant under the given
GSTIN.
In such
case, on the basis of additional information and the refund application
the jurisdictional Deputy Commissioner/Assistant Commissioner shall ensure that
budgetary support is limited to the tax paid in cash after utilization of
the input tax credit on the specified goods manufactured by the eligible unit. The return filed
by the unit may be covering the entire transactions taking place
outside the eligible unit in the same GSTIN.
(iv) Further, in cases where the
other unit operating
under same GSTIN, is supplying the inputs to the eligible unit as such or after
manufacture ,the credit availed by supplying unit
on the inputs would have to be factored for determining the input tax credit of
the eligible unit. The information in terms of para 5.9.2 of
the scheme is required to be submitted by the eligible unit duly certified by a
Chartered Accountant. The jurisdictional Deputy/ Assistant Commissioner in such cases
shall sanction the budgetary support after reducing input tax credit relatable to
inputs
used by the supplying unit under same GSTIN without payment of tax as certified
by a Chartered Accountant.
(v) Para 5.8 of the scheme defines the scope of manufacture
by the eligible unit.
The eligible unit
shall also indicate the value addition achieved by it in respect
of each category of specified goods and where the value addition is higher than
the limit provided in the table under the said para,
the sanction of the claim shall be after verification of
the value addition.
(vi) Para 6 of the scheme provides
for inspection
of the eligible
unit by a team
constituted by
DIPP and the findings of the team shall be provided to the Deputy/Assistant
Commissioner before sanction of the claim of budgetary support. However,
in cases where
inspection
cannot be conducted the budgetary support amount may be sanctioned
provisionally
for a period of six
months.
10. A separate
circular on the manner of allocation of the budget by DIPP and direct
transfer of the sanctioned amount into bank accounts of the beneficiaries through
PFMS would
be issued shortly. In the interim, trade facility may be issued to initiate
the process of registration and receipt of application for payment of budgetary
support for the quarter
July, 2017 to
September, 2017.
11. Difficulty
faced, if any,
in the implementation
of the Circular should be brought to the notice of the Board.
Encl.: As above.
