Government of Jammu and Kashmir has announced the Scheme for Jammu and Kashmir Reimbursement of Taxes to the eligble units in the State. The scheme has been announced in two parts – one for State Taxes and one for 42% of Central Taxes. The Scheme for reimbursement of State Taxes for promotion of industries in Jammu and Kashmir has been announced vide Notification No. SRO 519 dated 21.12.2017 and for those of reimbursement of 42% of Central taxes has been announced under vide Notification No. SRO 521 dated 21.12.2017 (together called as “State Scheme”). The State Scheme is in compliment to the Scheme for Budgetary Support (“SBS”) announced by Central Government vide Notification No. F. No. 10(1)/2017-DBA-II/NER, dated October 5, 2017. Key features of State Scheme are as under:
Eligibility
- State Scheme shall come into operation w.e.f. 08.07.2017 for an Eligible Manufacturing unit. ‘Eligible Manufacturing unit’ has been defined to mean a unit to whom SBS is available.
- State Scheme shall be available in respect of specified goods. ‘Specified goods’ means the goods manufactured by Industrial units as have been allowed by the department of industries / Handloom / Handicraft / Jammu and Kashmir Khadi and Village Industries Board / SICOP / SIDCO except than those as mentioned in Annexure A to the State Scheme.
- If inputs are procured by the Unit exclusively from any person who is paying tax under Composition Scheme as provided in Section 10 or from any unregistered person, the benefit of State Scheme shall not be available.
- Any unit making supply of services or interstate supply of finished goods directly or indirectly (through intermediaries / proxies), scheme shall not be available to such units.
- The State Scheme shall be available only to units providing employment to permanent residents of the State as per Industrial Policy 2016
Period of Benefit
- The benefit under State Scheme shall be available till the benefit is available under SBS. Under SBS, benefit shall be available till residual period. ‘Residual period’ means the remaining period out of the total period not exceeding ten years, from the date of commencement of commercial production, as specified under the relevant notification listed above, during which the eligible unit would have been eligible to avail exemption for the specified goods under the earlier regime.
Amount of benefit in form of Reimbursement
- Reimbursement shall be available on Quarterly basis.
- The benefit shall be available only after verification of both claims – under SBS and State Scheme.
- Reimbursement shall be allowed to the extent of State tax (J&KGST) paid through cash ledger after utilisation of IGST and State Tax (J&KGST).
- Verification has been provided for unit claiming value addition beyond a specified limit as provided for different class of goods in the State Scheme.
- Benefit shall be reduced proportionately when purchases are made from Composition Supplier / unregistered supplier.
Procedural requirements
- Application for Reimbursement under the State scheme shall be accompanied with the following documents:
- Application for registration on prescribed format to be notified by Commissioner Commercial Taxes
- Copy of last remission order under the earlier scheme of State government prior to implementation of GST.
- Registration certificate issued by Department of Industries and Commerce or Directorate of Handicraft / Handlooms or J&K Khadi and Village Industries Board or SICOP
- Declaration as annexed to State Scheme Notification
- Affidavit cum indemnity bond as annexed to State Scheme Notification
- Any other requisite document
- Scheme benefit is available to unit operating under single registration with other units in the state provided requisite details duly certified b a Chartered Accountant is supplies along with application.
- Supply invoices (and not goods) have to be stamped consciously with the words “FOR SUPPLY /CONSUMPTION IN THE STATE OF JAMMU AND KASHMIR ONLY”
- Procedure for inspection by appropriate authority has also been provided as part of procedure for claim for benefit under State Scheme.
