Circular No.1060/9/2017-CX
F.No: 116/15/2017-Cx-3
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
New Delhi, dated 27°" November, 2017
To
The Principal Chief Commissioner/ Chief Commissioner of GST & Central Excise
(Chandigarh, Meerut, Kolkata and Shillong zone)
DG, GSTI, New Delhi
Subject: Procedure for manual disbursal of budgetary support under Goods and
Service Tax Regime to the units located in States of Jammu &
Kashmir, Uttarakhand, Himachal Pradesh and North East including
Sikkim. —reg.
Madam/Sir,
As you are aware, under the Central Excise regime as its existed prior to
01.07.2017, the units located in the states of Jammu &Kashmir, Uttarakhand,
Himachal Pradesh and North East including Sikkim were eligible to avail exemption
from payment of Central Excise duty in terms of area based exemption notifications.
While ab-initio exemption was available to the units located in the States of
Uttarakhand and Himachal Pradesh, the units located in other aforesaid areas were
required to pay Central Excise duty and avail exemption by way of refund of cash
component of such duty paid.
2. Under GST regime there is no such exemption and the existing units which were
availing exemption from payment of Central Excise duty prior to 01.07.2017 are
required to pay CGST&SGST/IGST like a normal unit. Thus, presently no exemption is
available to these units by way of either ab-initio exemption or by way of refund.
3. In order to obviate the hardships faced by such units, Central Government has
decided to provide budgetary support to the eligible units which were Operating
under erstwhile Area Based Exemption Schemes, for the residual period for which
the units would have operated under the schemes, by way of refund of the Goods
and Services tax, limited to its share of CGST and/or IGST retained after devolution of
taxes to the states. In this regard Department of Industrial Policy and Promotion
(DIPP), Ministry of Commerce & Industry which is the administrative department for
the scheme, has issued a notification dated 05.10.2017 regarding “Scheme of
budgetary support under Goods and Service Tax Regime to the units located in States
of Jammu & Kashmir, Uttrakhand, Himachal Pradesh and North East including
Sikkim.” The gazette copy of the scheme, issued on 11.10.2017, can be accessed
from website www.e-gazette.nic.in under Ministry of Commerce and Industry. The
new scheme is introduced as a measure of goodwill, only to the units which were
eligible for availing benefits under the earlier excise duty exemption/refund schemes
but has otherwise no relation to the erstwhile schemes. The scheme of budgetary
support has come into operation w.e.f. 01.07.2017 for an eligible unit (as defined
under para 4.1 of the scheme) and shall remain in Operation for residual period (as
defined in para 4.3 of the scheme) in respect of specified goods (as defined in para
4.2 of the scheme). Budgetary Support under the scheme shall be worked out on
quarterly basis and claims for the same shall also be filed on a quarterly basis viz.
April to June, July to September, October to December and January to March. The
manner and method for determination of amount of Budgetary Support, recovery
procedure thereof etc has been enumerated in the scheme.
4. The amount of such budgetary support under the scheme for specified goods
manufactured by the eligible units shall be determined in terms of para 5 of the
scheme and _ shall be the sum total of (i) 58% of the Central tax paid through debit in
the cash ledger account maintained by the units in terms of sub-section(1) of section
49 the Central Goods and Services Act, 2017 and (ii) 29% of the integrated tax paid
through debit in the cash ledger account maintained by the units in terms of section
20 of the Integrated Goods and Services Act, 2017. However, where inputs are
procured from a registered person Operating under Composition Scheme under
Section 10 of the Central Goods and Services Act, 2017 the amount i.e. sum total of
(i) & (ii) above shall be reduced by the same percentage as is the percentage value of
inputs procured under Composition scheme out of the total value of inputs.
5. The budgetary support shall be disbursed from the budgetary allocation of
DIPP, which shall further allocate to PAO, CBEC for its disposal. The eligible unit is
required to obtain one time registration and file an application for payment of
budgetary support. The application shall be processed by the Deputy/Assistant
Commissioner of the Central Taxes for sanction of the admissible amount. The
sanctioned amount shall be credited into bank accounts of the beneficiaries through
PFMS platform of the Central Government.
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6. The claim for the quarter ending September, 2017 has already become due. In
order to mitigate the difficulties of the eligible units, it has been decided that units
would be registered on the basis of application filed by them manually and
application for claim of budgetary support for the said quarter would also be filed
and processed manually. The approval of the registration for the scheme and
processing of the application for budgetary support for the quarter shall also be
undertaken manually by the jurisdictional Deputy Commissioner/Assistant
Commissioner of the Central Tax. The sanctioned amount shall be credited into the
bank accounts of the beneficiaries through the PFMS platform in a manner fully
compliant with the direct transfer of the benefit to the account of the assessee.
7. The standard operating procedure for the claims relating to the first quarter
ending September, 2017 shall be as per para 8 to para 9 below.
8. Registration of the eligible units under the scheme
(i) The application for registration under the scheme by the eligible units
shall be submitted in triplicate in the format attached to this circular. The
application shall be signed by the proprietor/partner/managing director
of the eligible unit or by the person authorized by him in this behalf and
supported by the self-authenticated copies of the documents in support
of information as per the application. The registration under GST is a
necessary pre-requisite for the scheme.
(ii) In case more than one eligible unit is operating under the same GSTIN,
separate registration is required to be obtained for each of the eligible
units.
(iii) | The jurisdictional Deputy Commissioner/Assistant Commissioner of the
Central Taxes would examine the application in terms of the scheme as
notified on the basis of documents submitted along with the application
for registration.
(iv) | Aunique ID for each of the eligible units shall be allotted after registration
and ID shall be indicated in the following manner: - sl.no./ name of
Central Tax Division/name of Commissionerate/GSTIN. The ID shall be
endorsed on all the three copies of the application.
-3-
(v)
(vi)
(vii)
It shall be ensured by the jurisdictional Divisional Officer that record of
registration is maintained against the sl.no. which is part of the unique ID.
The second copy of the application after registration of the eligible unit
under an official communication shall be forwarded to the DDO of the
Division for registration of the unit under PFMS. This would ensure
validation of the Bank Account details of the beneficiary. This exercise
should be completed within 3 days of receipt of the copy of application by
the DDO.
The third copy of the application after registration shall be forwarded to
the ADG, DG Audit, Delhi who in turn would be providing the details to
programme division (PD) of DIPP in a compiled manner. The DIPP on the
basis
of these details shall draw a programme for inspection of the eligible
unit by a team constituted by them. Jurisdictional Commissionerate of
CGST shall provide necessary assistance in carrying out the inspection.
Immediately after completion of inspection a copy of Inspection report
would be forwarded to the Assistant/Deputy Commissioner having
jurisdiction over the eligible unit.
9. Submission of application for budgetary support by the eligible unit for
quarter ending September, 2017 and its sanction
(i)
(ii)
An eligible unit after allotment of the Unique ID may file an application
for claiming budgetary support under the provisions of para 5.7 of the
scheme in the format attached to this circular. The application shall be
filed by the eligible unit only after return for the quarter has been filed
and tax as per return is paid.
Once application is filed, duly supported by the prescribed document, the
same shall be processed for sanction. The claim shall be sanctioned after
verification of the tax paid by the eligible unit. The details relating to tax
payment in cash and input tax credit availed, utilized including purchases
made from a composition dealer during the quarter shall be available in
the GST returns of the taxpayer, which are available on the CBEC GST
Application for verification of the application for the budgetary support
A.
(iii)
(iv)
(v)
filed by the unit. The closing balance of the credit after end of the quarter
Shall also be provided for verification by the Assistant/Deputy
Commissioner.
In cases where an entity is carrying out its operations in a State from
multiple business premises , in addition to manufacture of specified goods
by the eligible unit, under the same GSTIN as that of the eligible unit, the
application for budgetary support shall be supported by additional
information duly certified by a Chartered Accountant, relating to receipt
of inputs( receipt from composition dealer to be indicated separately),
input tax credit involved on the inputs or capital goods received by the
eligible unit and the quantity of specified goods manufactured by the
eligible unit vis-a-vis the inputs, input tax credit availed and specified
goods supplied by the registrant under the given GSTIN.
In such case, on the basis of additional information and the refund
application the —_ jurisdictional Deputy Commissioner/Assistant
Commissioner shall ensure that budgetary support is limited to the tax
paid in cash after utilization of the input tax credit on the specified goods
manufactured by the eligible unit. The return filed by the unit may be
covering the entire transactions taking place outside the eligible unit in
the same GSTIN.
Further, in cases where the other unit operating under same GSTIN, is
supplying the inputs to the eligible unit as such or after manufacture , the
credit availed by supplying unit on the inputs would have to be factored
for determining the input tax credit of the eligible unit. The information in
terms of para 5.9.2 of the scheme is required to be submitted by the
eligible unit duly certified by a Chartered Accountant. The jurisdictional
Deputy/Assistant Commissioner in such cases shall sanction the budgetary
support after reducing input tax credit relatable to inputs used by the
supplying unit under same GSTIN without payment of tax as certified by a
Chartered Accountant.
Para 5.8 of the scheme defines the scope of manufacture by the eligible
unit. The eligible unit shall also indicate the value addition achieved by it
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in respect of each category of specified goods and where the value
addition is higher than the limit provided in the table under the said para,
the sanction of the claim shall be after verification of the value addition.
(vi) | Para 6 of the scheme provides for inspection of the eligible unit by a team
constituted by DIPP and the findings of the team shall be provided to the
Deputy/Assistant Commissioner before sanction of the claim of budgetary
support. However, in cases where inspection cannot be conducted the
budgetary support amount may be sanctioned provisionally for a period
of six months.
10. A separate circular on the manner of allocation of the budget by DIPP and direct
transfer of the sanctioned amount into bank accounts of the beneficiaries through
PFMS would be issued shortly. In the interim, trade facility may be issued to initiate
the process of registration and receipt of application for payment of budgetary
support for the quarter July, 2017 to September, 2017.
11. Difficulty faced, if any, in the implementation of the Circular should be brought to
the notice of the Board. Hindi version will follow.
Yours faithfully,
Encl.: As above.
(Rohan)
Under Secretary
CX3
Form for Registration of eligible units for budgetary support
GSTIN No.
Legal Name
Trade Name, if any
Central Excise Registration No.
Name of the unit
Address of the unit
State where the unit is located
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Date of commencement of
commercial production specified
goods-wise
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Authorisation issued by the State
Government, if any.
Erstwhile Central Excise
Notification under which
exemption was being availed up
to 30.06.2017
11, Residual Period of exemption
beyond 30.06.2017 which the
unit was entitled for under the
erstwhile exemption notification
— .
12. Period of budgetary support
beyond 30.06.2017 which the
unit would be entitled for
13. Details of specified good(s) for
which exemption availed under
erstwhile exemption notification
—
14. Bank Account Details for credit
of budgetary support
a. Name of the Bank
b. Branch Details
c. Account No.
d. IFSC no. of Branch
15. Value of clearance and Central
Excise duty paid during 2016-17
for each of the specified good(s)
16. Value of clearance and Central
Excise duty paid during 2017-18
(up to 30.06.2017) for each of
the specified good(s)
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17. Any other activity undertaken in
the State under the same GSTIN
18. No of persons employed in the
manufacturing unit
19, EPF no. of the eligible
unit/establishment of which the
eligible unit is part of
20.
ESIC no. of the eligible
unit/establishment of which the
eligible unit is part of
21, Consumption of electricity in
units (kwh) during financial
year 2016-17 and 2017-18 (up
to 30" June 2017).
Date Signature
(Proprietor/MD/Partner/
Place: Authorised Director/Authorised Signatory)
Seal of the registered entity under GST
Application for Budgetary Support
Unique ID No.
Legal Name
Trade Name, if any
Address of the eligible unit
ee
a
Tax Period
From <DD/MM/YY>_ To <DD/MM/YY>
6. Amount of Total Tax Paid during the quarter in respect of GSTIN as per the return
Name of the} Tax | Cash Credit | Balance of | Total value of | Total receipts
Tax Credit, if | Taxable inputs | from
any received composition
dealers
(A) (B) (C) (D) (E) (F) (G)
Central Tax
State/ UT Tax
Integrated Tax
Cess
Total
Information under this column includes all the business activities of the eligible unit viz. (i)
Specified goods manufactured (ii) non-specified goods manufactured (iii) Trading of goods(iv)
any other activity under the same GSTIN
7. Amount of Tax Paid out of 6 above (During the quarter in respect of manufacture by the
eligible unit in respect of specified goods under the same GSTIN) which are eligible for
budgetary support
Name of the | Tax | Cash Credit | Balance of | Total value of | Total receipts
Tax Credit, if | Taxable inputs | from
any received composition
dealers
(A) (B) | (© (D) (E) (F) (G)
Central Tax
State/ UT Tax
Integrated Tax
Cess
Total
(i) This column includes information in respect of all the Specified Goods manufactured
in the premises of eligible unit;
(it) The information under this column should be duly verified by the Chartered
Accountant in terms of Para 5.9.1 and 5.9.2 of the scheme of budgetary support notified
vide notification dated 05.10.2017 issued by Department of Industrial Policy and
Promotion.
However, in case information under column 6 and 7 above is identical and relates only (iii)
to the specified goods manufactured by the eligible unit, there is no need for
submission of Chartered Accountants certificate.
8. Claim of Budgetary Support based on S. No. 7 above to be calculated in following order
(a) Budgetary support in respect of intra-state supplies={(CGST in cash- Balance of (ITC of
CGST+ITC of IGST)) * 58%) * (1- Value under (G)}
Value under (F)
(b)Budgetary support in respect of inter-state supplies = {(IGST in cash- Balance# of (ITC of
IGST+ ITC of CGST)) * 29%) * (1- Value under (G)}
Value under (F)
# Balance to be taken under (b) after excluding amount considered under (a) above
(c) Total Budgetary Support = (a) + (b):-
9. Value addition achieved:-
( refer para 5.8 of notification
dated 05.10.2017)
10. Details of Bank Account (As indicated in Registration form by the eligible unit)
1. Account Number
li. Name of the Bank
ili. | Bank Account Type
iv. | Name of Account Holder
v. Address of Bank Branch
vi. | IFSC
vii. | MICR
Declaration:
(i) I hereby declare that the good(s) under the claim of budgetary support have been
manufactured by the eligible unit namely, M/s.................. operating at the address
Se er ae in the State of ................ The goods fall in the category of
specified goods defined under the scheme of budgetary support notified by DIPP.
(ii) hereby declare that the claim of budgetary support in the application does not
include any CGST or IGST paid on any goods supplied without activity of
manufacture by the eligible unit.
Date
Signature
(Proprietor/MD/Partner/
Place: Authorised Director/Authorised Signatory)
Seal of the eligible unit
