Industries in the north eastern and Himalayan states will continue to get tax exemption till March 2027, albeit as refund, under the current GST regime which was rolled out on July 1, Finance Minister Arun Jaitley said today. “Within the framework of the GST Act each industry will be entitled to its own refund mechanism during this particular period (March 31, 2027),” he said. The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given approval to the Scheme of providing budgetary support under the Goods and Service Tax (GST) regime for the eligible industrial units in Jammu & Kashmir, Uttarakhand, Himachal Pradesh and north eastern states including Sikkim, he said. The support shall be available for the residual period (ten years from the date of the commercial production) in the States of North Eastern region and the Himalayan States, he said. DIPP will notify the scheme, including detailed operational guidelines for its implementation within 6 weeks, he added. Under the new GST regime, there is no provision for exemption but there is one section under the Act which permits refunds. “Therefore, refund would be permitted through DBT. The sunset clause of these exemption has been extended to 2027. 4,284 industrial establishment will entitled to this benefit,” Jaitley said.
Budgetary support of Rs 27,413 crore for the Scheme has been approved from July 1, 2017 till March 31, 2027 for such industrial units located in these states which availed the benefit of Central Excise exemption prior to coming into force of GST regime, he said. The Centre was implementing North East Industrial and Investment Promotion Policy (NEIIPP), 2007 for north eastern states including Sikkim and Package for Special Category States for Jammu & Kashmir, Uttarakhand and Himachal Pradesh to promote industrialisation. One of the benefits of the NEIIPP, 2007 and Package for Special Category States was excise duty exemption for first 10 years after commencement of commercial production.
Upon repeal of the Central Excise duty laws, the government has decided to pay a budgetary support equal to the central share of the cash component of Central GST and Integrated GST paid by the affected eligible industrial units.