Background
Under the Central Excise regime prior to 01.07.2017, manufacturing units in specified states (Jammu & Kashmir, Uttarakhand, Himachal Pradesh, and North Eastern States including Sikkim) were eligible for exemption from Central Excise duty under area-based exemption notifications.
With the introduction of GST from 01.07.2017, these exemptions ceased. To mitigate hardships, the Central Government introduced a Scheme of Budgetary Support providing partial reimbursement of GST paid, limited to the Central Government’s share of CGST and/or IGST retained after devolution to states.
Unique Id System
The eligible units shall obtain one time registration on the ACES-GST portal and obtain a unique ID which is to be used for all processing of claims under the scheme.
The application by the eligible unit for reimbursement of budgetary support shall be filed on the ACES-GST portal with reference to unique ID obtained and shall be processed by the Deputy Commissioner or Assistant Commissioner of the Central Tax for sanction of the admissible amount of budgetary support.
The Unique ID serves as:
Eligible Unit (Para 4.1 of DIPP Notification)
A unit which was eligible before 01.07.2017 to avail ab-initio exemption or exemption by way of refund from payment of central excise duty under specified notifications and was availing such exemption immediately before 01.07.2017.
Specified States
Online Registration Process for Unique Id
Online Registration Steps (Para 5 of Circular)
Step 1: Portal Access
Registered GST taxpayers in the 11 States can obtain login credentials on the CBEC GST Portal (www.cbec-gst.gov.in) by entering their GSTIN under ‘login’.
Step 2: OTP Verification
A one-time password is sent to the Email-id and mobile number declared in the REG-01/REG-26 form filed at the GST Common portal.
Step 3: Password Setup
On logging in with the one-time password, taxpayer is prompted to change the password.
Step 4: Application Filing
With the new password, taxpayer can login to file an application for registration for Scheme of Budgetary Support.
Step 5: Mandatory Details
The taxpayer has to enter the mandatory details for all the eligible units under the GSTIN in the fields provided in the application form.
Step 6: Document Upload
The taxpayer can enclose supporting documents:
Step 7: Submission and Routing
Once submitted, the application is routed to the jurisdictional Deputy Commissioner or Assistant Commissioner of Central Tax having jurisdiction over the Principal Place of Business of the GST Registration.
Step 8: Processing and Unique ID Generation
The jurisdictional Deputy Commissioner or Assistant Commissioner of Central Tax may process and approve the registration, following which a unique ID will be generated for each of the units mentioned in the application.
Step 9: Status Tracking
Taxpayers can check the status of their Registration application by logging in to the portal.
Multiple Units under Same GSTIN
If more than one eligible unit is operating under the same GSTIN:
Budgetary Support Calculation
The amount shall be sum total of:
(i) 58% of the Central tax paid through debit in the cash ledger account after utilization of Input Tax Credit of Central Tax and Integrated Tax
(ii) 29% of the Integrated tax paid through debit in the cash ledger account after utilization of Input Tax Credit of Central Tax and Integrated Tax
Proviso: Where inputs are procured from a registered person operating under Composition Scheme, the amount shall be reduced by the same percentage as is the percentage value of inputs procured under Composition scheme out of total value of inputs procured.
The 58% has been fixed considering that Central Government devolves 42% of taxes on goods and services to States as per 14th Finance Commission recommendations.
Quarterly Basis (Para 5.4 of Notification)
Budgetary support worked out on quarterly basis:
Online Filing (Para 6 of Circular)
The application for disbursement of budgetary support for the quarter ending September, 2018 onwards would be filed only online.
User Manual
User Manual for Scheme of Budgetary Support is available on CBEC GST Portal (www.cbec-gst.gov.in) under:
Automation Phases (Para 3.1 of Circular)
The scheme was conceptualized to operate in an automated environment developed in 3 phases:
Phase (i): Registration
Online registration of units under the scheme
Phase (ii): Claim Filing
Online filing of applications by registered units for budgetary support
Phase (iii): Integration
Status: Phases (i) and (ii) completed. Phase (iii) was under development (likely ready by November 2018).
Processing and Sanction
Applications processed by the Deputy Commissioner or Assistant Commissioner of the Central Tax for sanction of admissible amount.
Sanctioning authority may call for additional information including:
Special audit by Chartered Accountant/Cost Accountant may be undertaken for units selected based on risk parameters to verify:
Such special audit undertaken only with approval of Commissioner, CGST.
Inspection Requirement (Para 6 of Notification)
Budgetary Support allowed subject to inspection by a team constituted by DIPP for every State to scrutinize implementation of previous schemes.
Where delay expected in inspection findings:
Disbursement Mechanism
List of sanctions for payment forwarded by:
Sanctioned amount disbursed:
Help Desk Support (Para 7 of Circular)
In case of operational difficulty or IT related glitches in registration:
CBIC Mitra Help Desk:
Mandatory Documents (Para 5.7 of Notification)
Manufacturer applying for benefit for first time shall file:
Recovery (Para 9.1)
Amount recovered along with interest @ 15% per annum from date of payment till date of repayment/recovery.
Saving Clause (Para 11 of Notification)
Upon cessation of the Scheme:
Penalty & Punishment
Failure to generate Unique ID for Budgetary Support shall lead to non-filing of application to Department of Industrial Promotion and Policy (DIPP) for notified scheme in respective state.
Penalties for Misuse
Grounds (Para 5.5 of Notification)
Unit found on investigation to:
Consequences
For more information refer:
Circular: Circular No.1067-6 -2018-CX
Notification: dipp-notification-dt-5-oct-2017-govt-scheme-budgetary-support-under-gst-units-located-jk-hp-uk-ne-sikkim.pdf
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