Jammu and Kashmir Reimbursement of Central Taxes for promotion of Industries in the State of Jammu and Kashmir - SRO 521 - Jammu and Kashmir SGST

Government of Jammu and Kashmir Finance Department Civil Secretariat, Jammu Notification Jammu, the 21 th December, 2017 SRO 521 - In pursuance of the cabinet decision No. 199/12/2017; Dated:23/10/2017, the Government in order to provide budgetary support to the existing eligible manufacturing units operating in the state of Jammu and Kashmir hereby notifies the following scheme for providing budgetary support to the manufacturing units in the shape of 42% of the Central Tax paid under Central Goods and Services Act 2017 after adjustment of the input tax credit. 1. SHORT TITLE AND COMMENCEMENT The scheme shall be called as Jammu and Kashmir Reimbursement of Central Taxes for promotion of Industries in the State of Jammu and Kashmir. The said Scheme shall come into operation w.e.f. 08.07.2017 for an eligible unit and shall remain in force till the scheme namely Budgetary Support under Goods and Services Tax regime to the Industrial Units located in States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim dated: the 5th of October, 2017 announced by Government of India is in operation. OBJECTIVE The State Government in recognition of the hardships arising due to withdrawal of remission from payment of Value Added Tax has decided that it would provide budgetary support to the eligible units by way of reimbursement of 42%of the Central Tax paid through debit in the cash ledger account maintained by the unit under Goods and Services Tax Act. 2. DEFINITIONS 2.1 Eligible Manufacturing unit' means a unit which avails the benefit of 58% reimbursement under Central Scheme namely Budgetary Support under Goods and Services Tax regime to the Industrial Units located in States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim dated: the 5th of October, 2017. 2.2 'Specified goods' means the goods manufactured by the Industrial Units as have been allowed by the department of Industries / Handloom/Handicrafts/Jammu and Kashmir Khadi and Village Industries Board/ Small Scale Industries Development Corporation Limited ( SICOP)/J K Industrial Development Corporation (SIDCO) except those mentioned in Annexure -A to this notification. 3. DETERMINATION OF THE AMOUNT OF REIMBURSEMENT 3.1 The amount of Reimbursement under the scheme for specified goods manufactured by the eligible unit shall be the sum total of:- (i) 42% of the Central tax paid (i.e the remaining amount of the Central Taxes paid by the Central Government under Scheme 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 ) through debit in the cash ledger account maintained by the unit in terms of sub-section (I) of section 49 the Central Goods and Services Act, 2017 after utilization of the Input tax credit of the Central Tax (CGST) and Integrated Tax (IGST). Provided where inputs are procured exclusively from a registered person operating under the Composition Scheme under Section 10 of the Jammu and Kashmir Goods and Services Tax Act, 2017 or from any unregistered persons, the benefit of the reimbursement will not be extended to the industrial units. Provided further that the Industrial Units shall not be eligible for the scheme if its making supply of services or supply of interstate supplies of finished goods either directly or through intermediaries or through proxies. Explanation: To avail benefit of this scheme, eligible unit shall first utilize input tax credit of Central tax and Integrated tax and balance of liability, if any, shall be paid in cash and where this condition is not fulfilled, the reimbursement sanctioning officer shall reduce the amount of reimbursement payable to the extent credit of Central tax and integrated tax, is not utilized for payment of tax. 3.2 Reimbursement under this scheme shall be worked out on quarterly basis for which claims shall be filed on a quarterly basis namely for January to March, April to June, July to September October to December. The reimbursement will be made only after verification and clearance of the claim for 58% to the industrial unit under Central Scheme. 3.3 Any unit which is found on investigation to over-state its production or make any misdeclaration to claim reimbursement would be made in-eligible for the scheme and shall be liable for recovery of excess reimbursement paid to the industrial unit, if any. Activity relating to concealment of input tax credit, purchase of inputs from unregistered suppliers (unless specifically exempt from GST registration) or routing of third party production or other activities aimed at enhancing the amount of reimbursement by mis-declaration would be treated as fraudulent activity and, without prejudice to any other action under law may invite denial of benefit under the scheme ab-initio. The units will have to declare total procurement of inputs from unregistered suppliers and from suppliers working under Composition Scheme under Jammu and Kashmir Goods and Services Tax Act, 2017. The grant of reimbursement under the scheme shall be subject to compliance of provisions relating to any other law in force. 3.4 The manufacturer applying for benefit under this scheme for the first time shall have to file the following documents: a) application for registration on prescribed format to be notified by Commissioner Commercial Taxes. b) the copy of the remission order latest issued by the jurisdictional Assessing Authority where such industrial unit was registered with the department of Commercial Taxes Jammu and Kashmir prior to the implementation of Goods and Services Tax Act 2017. c) Registration certificate issued by Department of Industries and Commerce or Directorate of Handicrafts /Handlooms or Jammu and Kashmir Khadi and Village Industries Board or SICOP. d) A declaration and a certificate as per Annexure-B, to be submitted on one time basis. e) An Affidavit-cum-indemnity bond, as per Annexure C, to be submitted on one time basis, binding itself to pay the amount repayable if any. f) Any other document evidencing the details required in clause (a) to (d) may be accepted with the approval of the Jurisdictional Additional Commissioner. 3.5 The manufacturer shall have to prefer claim for budgetary support for each quarter separately on prescribed format to be notified by Commissioner Commercial Taxes. 3.6 For the purpose of this Scheme, manufacture means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term manufacturer shall be construed accordingly. Where the State Tax paid on value addition is higher than the State Tax worked out on the value addition shown in column (4) of the table below, the unit may be taken up for verification of the value addition: Serial No. Chapter Description of goods Rate (%) Description of inputs for manufacture of goods in column (3) (1) (2) (3) (4) (5) 1 17 or 35 Modified starch or glucose 75 Maize , maize starch or tapioca starch 2 18 Cocoa butter or powder 75 Cocoa beans 3 25 Cement 75 Lime stone and gypsum 4 25 Cement clinker 75 Lime stone 5 29 All goods 29 Any goods 6 29 or 38 Fatty acids or glycerine 75 Crude palm kernel, coconut, mustard or rapeseed oil 7 30 All goods 56 Any goods 8 33 All goods 56 Any goods 9 34 All goods 38 Any goods 10 38 All goods 34 Any goods 11 39 All goods 26 Any goods 12 40 Tyres, tubes and flaps 41 Any goods 13 72 Ferro alloys, namely, ferro chrome, ferro manganese or silico manganese 75 Chrome ore or manganese ore 14 72 or 73 All goods 39 Any goods, other than iron ore 15 72 or 73 Iron and steel products 75 Iron ore 16 74 All goods 15 Any goods 17 76 All goods 36 Any goods 16 85 Electric motors and generators, electric generating sets and parts thereof 31 Any goods 19 Any chapter Goods other than those mentioned above in S.Nos.1 to 18 Explanation: For calculation of the value addition the procedure specified in notification issued by Department of Industrial Policy and Promotion Ministry of Commerce and Industry dated 05.10.2017 shall apply mutatis-mutandis. 3.7 In cases where an entity is carrying out its operations in the State from multiple business premises, in addition to manufacture of specified goods by the eligible unit, under the same GST Identification Number (GSTIN) as that of the eligible unit, the eligible unit shall submit application for reimbursement of budgetary support alongwith additional information on the claim form as prescribed in annexure D or any other format as may be notified by Commissioner. duly certified by a Chartered Accountant, relating to receipt of inputs, input tax credit involved on the inputs or capital goods received by the eligible unit and quantity of specified goods manufactured by the eligible unit vis-a-vis the inputs, input tax credit availed by the registrant under the given GSTIN. 3.8 Under CST, one business entity having multiple business premises would generally have one registration in the State in such situations where inputs are received from another business premises (of supplying unit) of the same registrant (GSTIN), the details of input tax credit of State Tax availed by the supplying unit for supplies to the eligible unit shall also be submitted duly certified by the Chartered Accountant along with the claim form as prescribed in annexure D or any other format as may be notified by Commissioner. 3.9 The Industrial Units eligible for reimbursement of taxes shall have to stamp the supply invoices conspicuously with the words, FOR SUPPLY/ CONSUMPTION IN THE STATE OF JAMMU AND KASHMIR ONLY . 3.10 The Scheme shall be available to only those industrial units who provide employment to permanent residents of the State of Jammu and Kashmir as per guidelines of Industrial Policy 2016. 3.11 The industrial units making purchases partly from the persons operating under Composition Scheme under section 10 of the Jammu and Kashmir Goods and Services Tax Act, 2017 and / or from unregistered persons shall submit the details of the such inputs duly certified by Chartered Accountant on prescribed format detailed as Annexure D or any other format as may be notified by Commissioner. The reimbursement to such industrial units will be in proportion to the inputs purchased from the registered dealers after adjustment of the input tax credit. 4. INSPECTION OF THE ELIGIBLE UNIT 4.1 The reimbursement under the Scheme shall be allowed to an eligible unit subject to an inspection by a team constituted by Commissioner Commercial Taxes. The inspection report shall be made available to the jurisdictional Assistant Commissioner/State Tax Officer before sanction of the reimbursement. Reimbursement amount will be released only after the findings to these teams are available. Provided that where delay is expected in such findings of the inspection, the Assistant Commissioner IState Tax Officer of State Taxes may sanction provisional reimbursement to the eligible unit. Such provisional reimbursement shall not continue beyond a period of six months. 5. MANNER OF BUDGETARY SUPPORT 5.1 The manufacturer shall file an application on prescribed format to be notified by Commissioner Commercial Taxes for reimbursement for the Tax paid in cash, other than the amount of Tax paid by utilization of Input Tax credit under the Central Goods and Services Tax Rules 2017, to the Assistant Commissioner [State Tax Officer, as the case may be, by the 15th day of the succeeding month after end of quarter after payment of tax relating to the quarter to which the claim relates. 5.2 The Assistant Commissioner/State Tax Officer of State Taxes, as the case may be, after such examination of the application as may be necessary, shall sanction reimbursement amount and forward the same in the prescribed format to the respective Additional Commissioners within one week after the receipt of application. 5.3 The concerned Additional Commissioners shall forward consolidated information of the concerned division to the nodal officer to be designated by Commissioner Commercial Taxes for reimbursement of GST to the eligible industrial units by the end of the month in which application is received and a copy of the same shall be forwarded to Commissioner Commercial Taxes for consolidation and submission to Government. 5.4 The concerned nodal officer shall credit the GST amount in the declared bank accounts of the industrial units referred to in the information forwarded by respective Additional Commissioners within seven days of receipt of consolidated information from the concemed Additional Commissioner. 5.5 The nodal officer shall intimate the Commissioner Commercial Taxes the amount disbursed to the beneficiary industrial units. 6. REPAYMENT BY CLAIMANT/ RECOVERY AND DISPUTE RESOLUTION 6.1 The reimbursement allowed is subject to the conditions specified under the scheme and in case of contravention of any provision of the scheme/ notification, the reimbursement shall be deemed to have never been allowed and any inadmissible reimbursement including the budgetary support paid for the past period under this scheme shall be recovered alongwith an interest @15% per annum thereon. In case of recovery-or voluntary adjustment of excess payment, repayment, recovery or return, interest shall also be paid by unit at the rate of fifteen per cent per annum calculated from the date of payment of refund till the date of repayment, recovery or return. 6.2 When any amount under the scheme is availed by wrong declaration of particulars regarding meeting the eligibility conditions in this scheme necessary action would be initiated and concluded in the individual case by the Office of concerned Assistant Commissioner or State Tax Officer of State Taxes, as the case may be. 6.3 That the Industrial Unit failing to intimate the Department any change in its constitution, bank account, line of activity, and title of the firm within the time allowed shall not be eligible for reimbursement of taxes for the period in which he fails to intimate the Depadment. 6.4 The procedure for recovery: Where any amount is recoverable from a unit, the Assistant Commissioner or State Tax Officer of State Tax, as the case may be, shall issue a demand note to the unit (i) intimating the amount recoverable from the unit and the date from which interest thereon is due and (ii) directing the manufacturer to deposit the full sum within 30 days of the issue of the demand note in the account head of State Taxes and submit proof of deposit to him/her. 6.5 Where the amount is not paid by the beneficiary within the time specified as above, action for recovery shall be taken in terms of the affidavit -cum- indemnity bond submitted by the applicant at the time of submission of the application, in addition to other modes of recovery. 6.6 Where any amount of reimbursement lor interest remains due from the unit, based on the report sent by the Assistant Commissioner/ State Tax Officer of State Tax as the case may be, the authorized officer as designated by the Commissioner shall, after the lapse of 60 days from the date of issue of the said demand note take required legal action and send a certificate specifying the amount due from the unit to the concerned Deputy Commissioner Recovery of the concerned Division to recover that amount, as if it were arrears of land revenue under J K Land Revenue Act. 7. SAVING CLAUSE Upon cessation of the Scheme, the unpaid claims shall be settled in accordance with the provisions of the Scheme while the recovery and dispute resolution mechanisms shall continue to be in force.. By order of the Government of Jammu and Kashmir. Sd/- (Navin K. Choudhary), IAS Principal Secretary to Government Finance Department