GST – Tax Refund Scheme of units located in Central Excise Exempt Zones

Certain manufacturing units located in states like Himachal, Uttarakhand, Jammu & Kashmir and north eastern states had been availing of exemption from Central Excise Duty on manufactured goods.


With the implementation of GST the exemption does not continue and it was announced that refund scheme with budgetary support would be extended by the Central Government to these units for the unavailed period of financial incentives.

It is now learnt that a draft scheme has been formulated which provides that

Ø The eligible unit shall first utilize the input tax credit of Central Tax or Integrated tax and the balance liability if any shall be paid through debit in cash ledger.

Ø Budgetary support would be given to the extent of

(a) 58 % of the CGST paid through debit in cash ledger.

(b) 29% of the IGST paid through debit through Cash ledger.

The 58% / 29% refund of CGST / IGST on intra State / Inter State sale respectively is based on the share of the revenue that accrues to the Central Government.

We shall update soon after the notification is issued.

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