J&K Govt announces withdrawal, modifications of industrial tax incentives

16 July 2021

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Srinagar, July 17: In a latest development, Jammu & Kashmir government on Friday announced withdrawal and modification of several tax incentives as well as remission of duty on industrial land transactions for the industrial sector.

Ziraat Times here summarizes the main changes and modifications made in the industrial incentives regime. (This is a developing news, and more details related to this development shall be produced in due course of time)

Withdrawal of SRO 431

The scheme notified by the Government vide SRO 431 dated 25th of September, 2018 regarding Budgetary support to the manufacturing units in the shape of reimbursement of Integrated Goods and Services Tax (IGST) paid under the scheme Jammu and Kashmir Reimbursement of Integrated Goods and Services Tax for promotion of Small/Medium/Large scale Industries in the State of Jammu and Kashmir shall stand withdrawn with effect from 01.04.2021.

Pertinently, this SRO pertains to Jammu and Kashmir Reimbursement of Integrated Taxes for promotion of Industries. A system existed that facilitated online applications for registration, budgetary support, sanctioning of reimbursement amount.

Withdrawal of SRO 134

The scheme namely Jammu and Kashmir reimbursement of State Taxes for encouraging large investments for Industrial Development in the State of Jammu and Kashmir scheme, notified by the Government vide SRO 134 dated 26th February, 2019) regarding Budgetary support to the manufacturing units operating in the State of Jammu and Kashmir and involving investment of rupees fifty crore or more either on substantial expansion of existing units or setting up of new unit, shall stand withdrawn with effect from 01.04.2021 .

In exercise of the powers conferred by clause (a) of section 9 of the StampsAct,Smvt.1977{XL of 1977), the Government hereby directs that there shall be remission of duty chargeable under the said Act for new as well as existing Industrial units undertaking substantial expansion in case of documents/instruments related to land transactions in Government Industrial Estates including lease/mortgage deeds executed by the Industrial Units under Jammu and Kashmir Industrial Policy 2021-30 notified by the Government vide No 117-IND of 2021 dated 19th April,2021.

What was SRO 134 all about?

SRO 134, dated 26^th of February, 2019, was a J&K government policy to provide budgetary support to manufacturing units operating in the state of Jammu and Kashmir and involving investment of rupees fifty crores or more either on substantial expansion of existing units or setting up of new unit shere by notifies the following scheme in the shape of reimbursement of State Taxes paid under Jammu and Kashmir Goods and Services Tax Act, 2017.

The scheme was limited to the tax which accrues on the additional taxable turnover resulting due to substantial expansion or on the full taxable turnover in case of newly established units (investing rupees fifty crores or more in plant and machinery)under Jammu and Kashmir Goods and Services Tax Act 2017 after adjustment of the input tax credit paid by the eligible manufacturing units.

Modification of SRO 63

In partial modification to SRO notification No. SRO 63 of 2018 dated 05.02.2018 regarding Budgetary support to the manufacturing units in the shape of reimbursement of State Taxes paid under the scheme Jammu and Kashmir reimbursement of taxes for promotion of small/medium/large scale Industries in the State of Jammu and Kashmir, J&K Government on Friday notified amendments in the scheme as under:

1.In.sub.,clause(2)of clause 1 for the words and figures”till the last date of Industrial Policy, 2016″ the words and figures “ti/I 31st ofMarch 2031” shall be substituted.

Section 2.1 shall be recast as under:

“Eligible Unit means a manufacturing unit registered with the Department of Industries and Commerce Jammu and Kashmir and has commenced commercial production/operation prior to 01.04.2021 and is registered under the Jammu and Kashmir Goods and Services Tax Act,2017 in the Union Territory of Jammu and Kashmir and also includes the units which shall or have become ineligible due to completion of residual period under the central scheme namely Budgetary Support under Goods and Services Tax regime to the Industrial units located in States ofJammu and Kashmir, Uttrakhand, Himachal Pradesh and North East including Sikkim dated 5th of October 2017except the units manufacturing goods mentioned in Annexure A to SRO 63 dated 5th February 2018 and the Units claiming reimbursement under SRO 519 dated 21/12117 till their residual period is ended.”

After clause 2.2,following clause 2.3 is added namely:

“Residual Period shall have the same meaning as assigned in the Scheme of Budgetary Support under Goods and Services Tax (GST) Regime to the units located in State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim” issued by Department of Industrial Policy and P~omotion, Ministry of Commerce and Industry, Government of India vide No. F. No.10(1)/2017-DBA-II/NER dated 5th October 2017.

Further, the conditions laid down in SRO 63 dated 5th February 2018 shall remain unchanged.

Remission of duty chargeable on industrial land transactions

In exercise of the powers conferred by clause (a) of section 9 of the Stamps Act, Smvt. 1977 {XL of 1977), the Government hereby directs that there shall be remission of duty chargeable under the said Act for new as well as existing Industrial units undertaking substantial expansion in case of documents/instruments related to land transactions in Government Industrial Estates including lease/mortgage deeds executed by the Industrial Units under Jammu and Kashmir Industrial Policy 2021-30 notified by the Government vide No 117-IND of 2021 dated 19th April, 2021.