Skip to main content

Centre to make provision for GST refund in excise free zones


The Union government has moved a proposal to make a budgetary provision for refunding its share of area based exemptions on indirect taxes given to certain states in the past.

In last week´s meeting of thee goods and services tax (GST) Council, it was decided that ´all entities exempted under payment of indirect tax under any existing incentives scheme of central or state governments shall not continue under the GST regime and existing units shall pay tax under the GST regime´.

Under the discretionary powers left to it by the Council regarding these incentives, the finance ministry has proposed to provide budgetary support for refunding its share in GST to such units to which exemptions in indirect taxes were granted, for promoting industrialisation.

The units are situated in Jammu &Kashmir, Himachal Pradesh, Uttrakhand and the north eastern states, In these states, some areas have been catagorised as excise free
zones and units in those areas were eligible for expemptions.

According to a finance ministry official,a budgetary provision will be made to refund the central government´s share in those incentives for the residual period of the unit. The refund will apparently be to the extent of 58 per cent of the Centre´s share of GST.

Since different units were set up at different intervals and their residual or balance period from the time they were set up could be different, the ministry proposes to calculate budgetary support on a monthly basis, said the source.

Certain limitation conditions regarding the benefits assured prior to GST implementation are proposed to be continued.According to the proposal, refund will be calculated after deducting input credit, if applicable foraunit. To ensure are fund is granted well in time,a proposal has been made that are fund application will have to be filed electronically by the seventh of the month succeeding the month in which GST has been paid; the refund will be granted in a month. This budgetary support will be paid from budgetary allocations made to the department of industrial policy and promotion under the ministry of commerce.

Business Standard New Delhi, 07th July 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…