Cabinet approves Rs27,413-cr for GST compensation to units in NE states
17 August 2017
The union cabinet on Wednesday approved a scheme of budgetary support under GST regime to the eligible units located in Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern states, including Sikkim
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has given its approval to provide for a budgetary support of Rs27,413 crore for the GST compensation scheme.
under Goods and Service Tax Regime for the eligible industrial units located in State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim. Budgetary support of Rs. 27,413 crore for the said
The scheme, which will be in operation from 1 July 2017 to 31 March 2027, will allow industrial units located in the north-and north-eastern states avail of the benefit of central excise exemption prior to coming into force of GST regime.
The government was in the process of implementing the North East Industrial and Investment Promotion Policy (NEIIPP), 2007 for North Eastern States, including Sikkim and a package for Special Category States for Jammu & Kashmir, Uttarakhand and Himachal Pradesh to promote industrialisation. The benefits of NEIIPP, 2007 and the package for Special Category States included excise duty exemption for the 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 CGST and IGST paid by the affected eligible industrial units. The support will be available for the residual period (ten years from the date of the commercial production) in the states of North Eastern region and Himalayan states. DIPP will notify the scheme, including detailed operational guidelines for implementation of the scheme within 6 weeks.
It is estimated that total number of 4,284 eligible units located in the states of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and the North East, including Sikkim, will benefit from the above scheme.