New Delhi, Aug 20 (KNN) Earlier this week the government announced relief to the industrial sector in the hilly areas by giving partial refund from the central government’s share of GST to eligible units under the GST who were availing the exemption.

Responding to the notification, industry in Jammy and Kashmir has written to the GST council to include existing units as well as units under expansions for the exemption.

The Association of Industries (AOI) in a memorandum to the Finance Minister said that the Association welcomes the announcement given by the central government.

However, with no official notification yet regarding the mechanism of return, the early assessment of the announcement suggests that the entire North-Eastern States along with Uttaranchal & Himachal Pradesh and J&K have been clubbed in one category in the announced package of incentives.

The Association added that The Central Excise notification 01/2010 was alive and operational for existing and new industry in Jammu and Kashmir. The impact of this abrupt withdrawal of the existing excise duty notification which was alive till 06-02-2020 is likely to adversely impact the existing industry and will discourage fresh investment in new industry.

The industry body further said that the small units’ earlier working in excise exemptions will not be able to avail of new package of incentives as they have been rendered ineligible.

Earlier central excise exemption package operative in the state allowed 100% refund of cash ledger within a prescribed ceiling of value addition. This has now been reduced and will be available for the balance period of 10 years of individual units. In effect the earlier incentive permitted existing units to become eligible for duty exemptions by way of substantial expansion and also new units from the date of commercial production.

The present policy will render new and existing units undertaking substantial expansion non-competitive against the existing eligible units.

AOI emphasized that previously small units under Rs. 1.50 crores turnover were exempted from excise duty and accordingly were able to compete with larger exempted units. Now all these units are ineligible for any central incentives and will be disadvantageously placed against eligible units. Further under the existing policy, units of the same trade will start becoming uncompetitive once their period of ten years is over viz-a-viz units who will have balanced period of ten years left.

The industry body has urged the PMO as well as the Finance Minister Arun Jaitley to take stock of their demands and consider extending the advantage of exemption to these units as well. (KNN/ DA)