ADITYA RAJ DAS / NEW DELHI
The All India Tax Advocates Forum (AITAF) has urged the Finance Minister Arun Jaitley to prevail upon the GST Council to allow the full Excise Duty exemption granted earlier under the erstwhile Industrial Policy available to North – Eastern States in the form of refund of Excise Duty paid on value addition other than utilization of CENVAT Credit.
Restoration of this tax benefit, which has been drastically reduced under the new GST regime, will immensely help small time entrepreneurs and businessmen, whose contribution to the national economy has been acknowledged time and again,” the AITAF President M K Gandhi said in a statement issued here.
Pointing out that withdrawal of the tax benefit has financially crippled small scale industries, Gandhi—a noted tax consultant said with the implementation of GST, the erstwhile excise exemption granted to North Eastern States had been withdrawn.
However, with a view to extend the benefit of the excise exemption for the residual period, Ministry of Commerce and Industry has notified the Scheme of Budgetary Support under Goods and Service Tax.
Gandhi lamented that notwithstanding this notification benefit extended under GST has been considerably reduced.
He noted with concern the refund benefit is now limited to duty paid on value addition from current account. Further, the maximum limit of value addition chapter-wise has also been fixed in the table incorporated under the notification.
As per the table a good falling under Chapter 33 and the total duty payable on clearance is Rs. 100/-. The maximum limit of value addition to claim refund was fixed at 56 per cent of the total duty payable.
So, out of the total duty payable of Rs. 100/-, refund of up to maximum of Rs. 56 could be claimed, provided that the said payment was made from PLA and had been made after utilizing the whole of Credit available.
Thus, Gandhi explained “it is very clear that the benefit under GST has been reduced to 58 per cent of the benefit under Excise Regime, thus putting the manufacturer at a loss on account of the refund benefit.”
Besides the financial loss, the AITAF Chief said there are number of issues which need intervention of the GST council.
For instance Gandhi said under the erstwhile Excise exemption, the refund benefit was on monthly basis, which has now been made quarterly under the GST Budgetary Support Scheme (BSS), thus blocking the amount towards refund benefit of the manufacturer by almost 3 months and putting them to financial hardship.
Drawing attention of the Finance Minister Gandhi said under the erstwhile Excise Exemption, the refund was available in the form of self-credit, to be availed by the manufacturer within 15 days of end of the month under reference.
Whereas, under the BSS of GST, there is no such self-credit mechanism available, he added.
Moreover, no time-limit has been prescribed for the concerned officer to process refund benefit under GST Budgetary Support Scheme, which may lead to inordinate delay in processing the refund benefit and again putting the manufacturer to financial hardship, Gandhi pointed out.
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