The Union Cabinet has approved a proposal to extend tax exemption to industries in the north eastern and Himalayan states till March 2027, , albeit as refund, under the current GST regime which was rolled out on July 1, Finance Minister Arun Jaitley said today.
"Within the framework of the GST Act each industry will be entitled to its own refund mechanism during this particular period (March 31, 2027)," he said after the Cabinet meeting headed by Prime Minister Narendra Modi.
Industries in the north eastern including Sikkim and Himalayan states of Jammu and Kashmir, Himachal Pradesh and Uttarakhand under the previous excise regime used to get 10-year exemption, he said.
As per the scheme, industries which commenced operations during the period got excise tax holiday for 10 years, he said, adding that there is a separate residuary period for every industry because of commencement of production and their consequent entitlement of 10 year exemption.
"Budgetary support of Rs. 27,413 crore for the said Scheme has been approved for the period from 1.7.2017 till 31.03.2027 for such industrial units located in aforesaid States which availed the benefit of Central Excise exemption prior to coming into force of GST regime," an official statement said.
Under the new Goods and Services Tax (GST) regime, there is no provision for exemption but there is one section under the Act which permits refunds.
"Therefore, refund would be permitted through DBT. The sunset clause of these exemption has been extended to 2027.
4,284 industrial establishment will entitled to this benefit," he said.
(With PTI inputs)