Jammu and Kashmir Reimbursement of State Taxes for encouraging large investments for industrial development in the State of Jammu and Kashmir. - SRO-134 - Jammu and Kashmir SGST

GOVERNMENT OF JAMMU AND KASHMIR CIVIL SECRETARIAT-FINANCE DEPARTMENT Notification Jammu, the 26th of February, 2019. SRO-134 .-The Government in order to provide budgetary support to manufacturing units operating in the State of Jammu and Kashmir and involving investment of rupees fifty crores or more either on substantial expansion of existing units or setting up of new unit shere by notifies the following scheme in the shape of reimbursement of State Taxes paid under Jammu and Kashmir Goods and Services Tax Act, 2017. The scheme shall be limited to the tax which accrues on the additional taxable turnover resulting due to substantial expansion or on the full taxable turnover in case of newly established units (investing rupees fifty crores or more in plant and machinery) under Jammu and Kashmir Goods and Services Tax Act, 2017 after adjustment of the input tax credit paid by the eligible manufacturing units. 1. Short title and commencement.-The scheme shall be called as Jammu and Kashmir Reimbursement of State Taxes for encouraging large investments for industrial development in the State of Jammu and Kashmir. Objective.-The State Government in order to encourage large investments as per policy targets set under Industrial Policy, 2016 has decided that it would provide budgetary support to the eligible units by way of part reimbursement of the State Goods and Services Tax, paid by the Industrial unit after adjustment of Input Tax Credit on supply of finished goods manufactured by it. The scheme shall be applicable to only such existing units undergoing substantial expansion or to such new units being set up on or after 01-02-2019. 2. Definitions. 2.1 Eligible unit means- (a) a unit having GST registration for the premises as a place of business, where manufacturing activity is already being carried out by the Industrial Unit and the same is undergoing substantial expansion involving additional investment of rupees fifty crores or above in plant and machinery certified by Industries and Commerce Department. Or (b) a newly established industrial unit which has made an investment of rupees fifty crores or more in plant and machinery certified by Industries and Commerce Department and having GST registration for the premises as a place of business, where manufacturing activity is carried out by the Unit : Provided that the industrial units applying under this scheme is eligible for reimbursement of Central Share of CGST as per Industrial Development Scheme for the State of Jammu and Kashmir 2017 as notified by the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry, Government of India vide Notification No F. No. 2 (2)/2018-SPS dated 01-01-2019. 2.2 Specified goods means the goods manufactured by the Industrial Units as have been allowed by the department of Industries and Commerce. 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- (i) amount of State Tax paid by the eligible unit as per Para 2.1(a) on the additional turnover resulting from the substantial expansion (with reference to the increase in turnover post expansion as certified by Industries and Commerce Department) through debit in the cash ledger account maintained by the unit in terms of sub-section (1) of section 49, the Jammu and Kashmir Goods and Services Tax Act, 2017 after utilization of the Input Tax Credit of the State Tax and Integrated Tax. Illustration : Value of inward supply of goods from Delhi Rs. 100000.00 Basic value of goods Rs. 100000.00 Liability (Rs.) ITC of IGST utilized (Rs.) To be paid in cash (Rs.) Paid (Rs.) IGST ₹ 18000 Value addition @20% ₹ 20000.00 CGST @9% 10800.00 10800.00 0.00 0.00 Total ₹ 118000.00 Sale value of goods ₹ 120000.00 SGST @9% 10800.00 7200.00 3600.00 3600.00 CGST @9% ₹ 10800.00 ITCIGST 18000.00 SGST @9% ₹ 10800.00 ITC CGST 0.00 Total bill Value ₹ 141600.00 ITC SGST 0.00 Reimbursement claim : Turnover prior to expansion =₹ 75000.00 Increase in turnover due = Rs. (120000.00-75000.00) =₹ 45000.00 to substantial expansion of the unit %age of increase in turnover = 37.5% SGST deposited = ₹ 3600.00 Reimbursement claim = 37.5% of ₹ 3600.00 = ₹ 1350.00 Or (ii) an amount of State Tax paid through debit in the cash ledger account maintained by the newly established unit [as per para 2.1 (b)] in terms of sub-section (l) of section 49, the Jammu and Kashmir Goods and Services Tax Act, 2017 after utilization of the Input Tax Credit of the State Tax and Integrated Tax. 3.2 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. However, if the purchases are made partly from registered, unregistered or composition dealers the benefit will be as per para 3.10 : Provided further that the Industrial Units shall not be eligible for the scheme if it is 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 Integrated Tax and State Tax and balance of liability, if any, shall be paid in cash. Where this condition is not fulfilled, the reimbursement sanctioning officer shall reduce the amount of reimbursement payable to the extent of balance of credit of State tax and integrated tax, not utilized for payment of tax/liability. 3.3 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 and October to December. 3.4 Any unit which is found on investigation to over-state its production or make any mis-declaration to claim reimbursement would be 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 misdeclaration 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. The manufacturer applying for benefit under this scheme for the first time shall also file the following documents in the office of the concerned Assessing Authority :- (a) 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. (b) A declaration and a certificate as per Annexure-A, to be submitted on one time basis. (c) An Affidavit-cum-Indemnity bond, as per Annexure-B, to be submitted on one time basis, binding itself to pay the amount repayable, if any. (d) A certificate from the Department of Industries and Commerce mentioning therein that the unit has achieved 100 per cent production capacity prior to substantial expansion (in case of industrial units undergoing substantial expansion by investing rupees fifty crores or more) and shall be only applicable to turnover over and above the turnover achieved on utilization of 100% of existing set up. Any other document evidencing the details required in clause (a) to (d) may be accepted with the approval of the Jurisdictional Additional Commissioner (Administration and Enforcement). A new industrial unit investing fifty crores or more in plant and machinery shall be required to fulfil the following conditions :- (i) It shall not be formed/established by splitting up, or reconstruction of a business already in existence. (ii) It shall not be formed/established by transfer to the new unit of plant or machinery previously used for any other purpose. (iii) It shall not be relocated from elsewhere and/or is not an existing unit reopened under a new name and style. 3.5 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 3.6 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 along with additional information on the claim form as prescribed in Annexure-C or any other format as may be notified by the Commissioner. Explanation :-Industrial Units having Annual Turnover of more than ₹ 1.5 crores shall mandatorily submit Annexure C duly certified by a Chartered Accountant. 3.7 Under GST, 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 along with the claim form as prescribed in Annexure C or any other format as may be notified by Commissioner. Explanation :-Industrial Units having Annual Turnover of more than ₹ 1.5 crores shall mandatorily submit Annexure C duly certified by a Chartered Accountant. 3.8 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 . 3.9 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. 3.10 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 on prescribed format detailed as Annexure C 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 State 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/State 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 State Taxes for reimbursement for the Tax paid in cash (in proportion to the increase in turnover post expansion), other than the amount of Tax paid by utilization of Input Tax Credit under Jammu and Kashmir 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 (to be calculated in the manner as shown in illustration) 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 State Taxes for reimbursement of GST to the eligible prestigious industrial units by the end of the month in which application is received and a copy of the same shall be forwarded to Commissioner State 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 concerned Additional Commissioner. 5.5 The nodal officer shall intimate the Commissioner State 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 along with an interest @16% 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 Department. 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/or 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. (Sd.) NAVIN K. CHOUDHARY, IAS, Principal Secretary to Government, Finance Department.