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
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
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