The Gujarat (India) Government has declared a new scheme under which a part of State Goods & Service Tax (SGST) will be reimbursed to textile industry. The industry presently has to pay a 2.5 per cent of SGST to the Government.
The new scheme has been introduced after a year to compensate VAT incentives promised to textile manufacturers under the Textile Policy 2012. Earlier, the textile sector used to get 2.5 per cent of the VAT paid as incentives.
Only the eligible manufacturing units will get the benefits of this reimbursement scheme. The reimbursed amount will comprise of the total of SGST amount paid through cash ledger against the output liability of SGST on the sale of eligible products. Also, only the inputs and input services will be qualified for reimbursement and not the ITC (input tax credit) of capital goods.
The manufacturing units need to use all the ITC available in its credit ledger on the common portal. The Industry Commissioner will be responsible for granting the reimbursements on quarterly basis or as recommended otherwise.
The decision came out on the suggestions of a high-level committee headed by the Principal Secretary of the Industries and Mines Department. The committee submitted the recommendations about the modalities of SGST incentives to the Government under GGST Act, 2017 and GGST Rules, 2017.
The Government Resolution (GR) for the textile sector made it clear that similar SGST incentives will be announced for other sectors as well.