GUWAHATI, Jan 19 - With a view to attract big-ticket investments to the State, the Assam government has announced reimbursements of tax to industries under the GST regime for a period till December 31, 2022.
The Assam Industries (Tax Reimbursement for Eligible Units) Scheme, 2017, which had been cleared by the State Cabinet recently, was formally notified by the State government today.
Finance Minister Himanta Biswa Sarma said that under the new policy, tax reimbursement shall be available to the units existing on the date of transition to GST as well as to the new units and expansion units set up after July 1, 2017, during GST regime and up to December 31, 2022.
“The limit of tax exemption for medium and large units has been increased from 100 per cent to 150 per cent of fixed capital investment, whereas for mega units the tax exemption is proposed with the maximum ceiling of 200 per cent of fixed capital investment,” Sarma told media-persons.
The new policy provides for 100 per cent tax reimbursement every year irrespective of any capacity utilization for 15 years.
“The reducing system of tax exemptions from 100 per cent to 80 per cent and then to 50 per cent in subsequent years and linkage with capacity utilization have been removed. It will substantially improve the working capital flow. The eligible unit shall be entitled to tax reimbursement of SGST portion paid in cash after adjustment of SGST input tax credit as well as ISGT credit,” said the minister.
The State government will lose Rs 450 crore in revenue immediately for existing units due to the new policy.
“After the Global Investors’ Summit, when more industries will come, we will lose more money. But the new policy will give confidence to the industry. Besides, the revenue loss will be offset by huge employment generation,” said Sarma.
He said that under the GST the fiscal incentive for industries has been moved to the “reimbursement regime” as against the earlier “exemption regime”.
To provide reimbursement of tax paid under the Assam Goods and Services Tax, 2017, to the eligible units, the Assam Industries (Tax Reimbursement for Eligible Units) Scheme, 2017, was approved recently by the State Cabinet and notified today.
“For the first time, the proportionate investment in land (used only for factory building or for hotel and resort building, excluding vacant land) will be included in the fixed capital investment of the new units.
“In order to promote tourism, 100 per cent tax reimbursement to hotels and resorts above two-star category and river cruise is proposed for 15 years, subject to applicable monetary ceiling. Earlier the tax exemption was limited to room rent only but now it would extend even to food and other services,” said the minister.
Special provisions have been put in place to promote generation of power through renewable sources of energy by including such investment in the fixed capital investment of an existing unit subject to some conditions.
“Tax reimbursement can be claimed on monthly basis under the new policy. A Tax Reimbursement Committee (TRC) comprising Commissioner of State Tax, Additional Commissioner of State Tax, Joint Commissioner of State Tax and a representative from the Commissioner of Industries shall examine reimbursement proposals on monthly basis and give its recommendations for sanction of reimbursement. For cases where tax reimbursement by an eligible unit exceeds Rs 50 lakh for the month, the TRC shall be chaired by Additional Chief Secretary or Principal Secretary (Finance). Any kind of audit will be undertaken post tax reimbursement only,” said the Finance Minister.
Special provision has been proposed for provisional tax reimbursement during the pendency of issue of Eligibility Certificate and Certificate of Entitlement, if such certificates are not issued within a period of one year from application. “In case an eligible unit is not able to utilize its monetary limit of reimbursement within the specified period, the government may extend the same by another five years on sufficient grounds being shown. Every year the Finance Department shall place adequate budgetary allocation at the disposal of the Commissioner of State Tax for making these reimbursements,” he said.