Centre Extends Tax Incentives For Industries In North East, Hilly States
Industries in the north eastern and Himalayan states under the previous excise regime used to get 10-year exemption.
Manufacturing units in the north-east and hilly states that used to get excise exemption before the Goods and Services Tax will continue to receive the benefit for another 10 years.
The relief will be in the form of refunds as there is no provision of exemption under GST, said Finance Ministry Arun Jaitley after a meeting of the Union Cabinet on Wednesday.
As many as 4,284 establishments in Jammu and Kashmir, Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim will gain from the decision. This will cost the exchequer Rs 27,413 crore in 10 years to March 31, 2027, Jaitley said.
Before GST was rolled out on July 1, the government used to grant central excise exemption, as an incentive, to industries that had set up production units in the 11 states. But this levy was subsumed under GST along with other indirect taxes.
To ensure that there is no break in the tax holiday, Jaitley said, the Centre has decided to give up its share as per the new tax regime. These industries will get a refund equivalent to 58 percent of the central goods and services tax and the integrated goods and services tax. That follows the 14th Finance Commission’s recommendations, which pegged the states' share in central taxes at 42 percent.
These refunds will happen through the direct benefit transfer mechanism, Jaitley said.
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