GUWAHATI, Jan 27 - The Federation of Industry & Commerce of North Eastern Region (FINER) has congratulated Finance Minister Himanta Biswa Sarma over the policy of tax reimbursement announced on January 19.
In a release, FINER said the industry fraternity that was under immense pressure and was apprehensive in the post-GST regime, has heaved a sigh of relief with the announcement of the refund mechanism. The implementation of GST had rendered the earlier prevalent system of remission redundant, and eligible and new units were unable to get state tax exemption benefits under the new scheme.
The scheme for reimbursement announced covers both the existing and new industrial units in the State that started production from July 1, 2017. Assam is the first State in the country to formulate such a scheme, and the State finance department is to be particularly commended for its efforts.
FINER observed that the announcement of the scheme before the ensuing Global Investors Summit, would be useful in attracting investment to the State.
The policy, if communicated well, supported by a single-window time-bound and hassle-free refund mechanism on the ground level, would attract investments and also have clusters of micro and small units coming up and thereby aid employment generation and GDP growth of the State.
However, FINER has pointed to a few shortcomings of the policy. Allowing units to undertake expansion only after three years have elapsed, and linking it to the capacity utilisation, would make things cumbersome and limit investments. Many units, which manufacture products to be sold in other states, would find it difficult to exhaust their quantum of eligibility in the 15-20-year space provided. The State government would have to look for some alternate ways to provide other benefits to these units.
The existing units (units that started output under NEIIPP 2007) in the State were eligible for 100 per cent refund of excise duty paid for a period of 10 years from the date of commercial production. The entire refund was borne by the Central Govt under the pre-GST system. Post GST, the Central Govt has come out with a refund scheme of CGST, wherein the refunds have been reduced from 100 per cent to 58 per cent. It was said the balance of 42 per cent would/could be taken care of by the states. The reimbursement notification only covers the amounts payable under SGST. No mention has been made of refund of the State�s share of 42 per cent. Units set up in the State before March 31, 2017, would be at a huge loss in the absence of any clarification on this, FINER said.