Good News for manufacturing units in Jammu and Kashmir: Govt make provisions of tax reimbursement for promotion of industries

Jammu and Kashmir govt clears plan to reimburse 100 per cent re-imbursement of the State Tax paid (SGST) after utilization of the Input Tax Credit (ITC).

According to news report of Daily Excelsior, The Finance Department of Jammu and Kashmir Government has announced budgetary support for eligible manufacturing units in Jammu and Kashmir. Tax refund jammu kashmir GST sgst


  1. The Finance Department on friday issued two SROs to this effect bearing Nos. 519 and 521. The Government Orders said the State would reimburse 42 per cent of the Central Tax paid (CGST) in addition to 58 per cent reimbursed by the Central Government under its existing scheme, after utilization of the Input Tax Credit under Jammu and Kashmir Goods and Services Tax Act, 2017.
  2. The scheme would be applicable to existing eligible manufacturing units operating in the State, registered under erstwhile schemes of the Central Excise Nos. 56/2002-CE, 57/2002-CE and 01/2010-CE.
  3. The support is in the shape of 100 per cent reimbursement of the State Tax paid (SGST) after utilization of the input tax credit. However, incentives for such units, which were not registered with the Central schemes or went not availing benefit of these schemes, will be taken up in the coming budget.
  4. Through SRO 519, the Government notified ‘J&K Reimbursement of State Taxes for promotion of industries in the State’ Scheme while in the SRO 521, it notified the scheme ‘J&K Reimbursement of Central Taxes for promotion of industries in the State.’
  5. Benefits of both the Schemes will be available to only those industrial units which provide employment to permanent residents of Jammu and Kashmir as per guidelines of Industrial Policy 2016.
  6. The Government, in order to provide budgetary support to the existing eligible manufacturing units operating in the State, notified the scheme for providing budgetary support to the manufacturing units in the shape of 42 per cent Central Tax paid under Central Goods and Services Act 2017 after adjustment of input tax credit.
  7. To avail benefit of these Schemes, eligible unit shall first utilize Input Tax Credit of State tax and Integrated tax besides Central Tax and Integrated Tax and balance of liability, if any, shall be paid in cash and where this condition is not fulfilled, the reimbursement sanctioning officer will reduce the amount of reimbursement payable to the extent credit of State Tax and Integrated Tax apart from Central Tax and Integrated Tax, is not utilized for payment of taxes.
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  8. The reimbursement under the twin Schemes, however, will be subject to an inspection by a team constituted by Commissioner Commercial Taxes. The inspection report will be made available to the jurisdictional Assistant Commissioner/ State Tax Officer before sanction of the reimbursement. The amount will be released only after the findings to these teams are available. If there is delay in findings of the inspection, the Assistant Commissioner /State Tax Officer of State Taxes may sanction provisional reimbursement to the eligible unit. Such provisional reimbursement will not continue beyond a period of six months.
  9. The manufacturer will file an application for reimbursement for the Tax paid in cash, other than the amount of Tax paid by utilization of Input Tax credit under the Jammu and Kashmir Goods and Services Tax Rules 2017.
  10. The SRO cautioned that if any amount under the Schemes is availed by wrong declaration of particulars regarding meeting the eligibility conditions in this scheme, necessary action would be initiated and concluded in the individual case by the Office of concerned Assistant Commissioner or State Tax Officer of State Taxes.
  11. Where any amount is recoverable from a unit, the Assistant Commissioner or State Tax Officer of State Tax, as the case may be, will issue a demand note to the unit intimating the amount recoverable from the unit and the date from which interest thereon is due and directing the manufacturer to deposit the full sum within 30 days of the issue of the demand note in the account head of State Taxes and submit proof of deposit to them.
  12. Upon cessation of the two Schemes, the unpaid claims will be settled in accordance with the provisions (of the Schemes) while the recovery and dispute resolution mechanisms will be continue to be in force.
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