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Scheme for Budgetary Support (SBS)

The Department of Industrial Promotion and Policy (DIPP) has declared a scheme to extend the budgetary support to the manufacturing units in the backward areas. These areas avail central excise benefits as per the area-based exemption notification under different Industrial Promotion Scheme of the Government of India. The duration of the scheme would be from 01.07.2017 to 31.03.2027. This article briefly covers the scheme along with the registration process.

Background of SBS

The GST Council that was held on 30.09.2016 brings into notice that the exemption from payment of indirect tax under any existing tax incentive scheme of Central or State Government will not be continued under the GST regime and the respective units are required to pay tax in the GST regime. The Council left it to the discretion of the Central and State Governments to notify this scheme to the units. Based on the hardships encountered by the units, the central government decided that it would provide budgetary support by way of reimbursing of GST paid by the unit to the central government through CGST and/or IGST retained after devolution of a part of these taxes to the States.

Applicable States

The Scheme for Budgetary Support applies to the following states.

Jammu and Kashmir
Himachal Pradesh
Uttarakhand
Arunachal Pradesh
Nagaland
Manipur
Mizoram
Tripura
Meghalaya
Assam
Sikkim

Determination of the Amount of Budgetary Support

The amount of budgetary support that is allocated under the scheme for specific goods manufactured by eligible units shall be a total of

58% of the Central tax that is paid using debit in the cash ledger account that is maintained by the unit, as per Section (1) of Section 49 of the Central Goods and Services Act, 2017 after utilising the Input Credit of the Central Tax and Integrated Tax.
29% of the integrated tax that is paid using debit in the cash ledger maintained by the unit according to Section 20 of the Integrated Goods and Services Act, 2017 after utilising the Input Credit of the Central Tax and Integrated Tax.

Provided the inputs are obtained from a registered individual operating under the Composition Scheme under Section 10 of the Central Goods and Services Act, 201. The above-mentioned amount shall be reduced by the same percentage, as is the percentage value of inputs obtained under Composition scheme out of the total value of inputs that are obtained.

Inspection of the Eligible Unit

The Budgetary Support under the scheme shall be allowed to an unit to an inspection team constituted by DIPP for every State. The report shall be uploaded by the inspection team to the portal of Central Board of Excise and Customs (CBEC). After inspection by the jurisdictional commissioner of Central Taxes and will reimburse to the unit. Such reimbursement shall not exceed beyond a period of six months.

Manner of Budgetary Support

The manufacturer files an application for payment of budgetary support for the Tax paid in cash, other than the amount of tax that is paid by utilization of Input Tax Credit as per the Input Tax Credit Rules, 2017 to the Assistant Commissioner or Deputy Commissioner of Central Taxes, by the 15th of the following month after end of quarter after payment of tax relating to the quarter to the related claim.

The Assistant Commissioner or Deputy Commissioner of Central Taxes, after examination of the application, sanctions reimbursement of the budgetary support. The sanctioned amount will be conveyed to the applicant electronically. The PAO, CBEC sanctions and disburses the recommended reimbursement of budgetary support.

Registration Process

Step 1: The taxpayer has to click the ‘Login’ option. The taxpayer login page appears as shown below.

Step 2: The taxpayer has to click the ‘Register’ link that is given below the ‘New User’ Option. First-time users have to click the ‘Register’ button from the login portal.

Step 3: If GSTIN in not registered, an error message ‘Invalid GSTIN’ appears.

If GSTIN of any other area is used, an error message of ‘You are not eligible for Scheme of Budgetary Support Registration’ appears on the screen.

Step 4: Once the valid GSTIN is entered, a password will be sent to the user’s mobile and e-mail address.

Step 5: Click Login link on the right side and enter the registered GSTIN.

Step 6: Enter the password and clear the captcha code. Click the ‘Login’ button.

Step 7: On successful login, a dashboard appears. Click ‘Logout’ to log out of the application.

Step 8: Create a new password if required, and then the Scheme for Budgetary Support dashboard appears on the screen.

Step 9: To register the units, the user has to either click on the Register button or click on the ‘Menu’ option and select ‘Registration for Scheme for Budgetary Support’.

Step 10: The details of the record, GSTIN, legal name, trade name and state appears. The users would be able to add multiple units. All date fields in the application can be entered using the calendar icon.

Step 11: The user has to click the ‘Unit Details’ tab and enter all the required details.

Step 12: Once all the details are entered, the ‘Add Unit’ button will be enabled. Click ‘Add Unit’ button.

Step 13: The taxpayer has to click the ‘Save’ button to save the unit.

Step 14: Click ‘Next’ button or click the new tab.

Step 15: The user has to click the ‘Goods for which Exemption Availed’ tab to add the Goods details. If there is more then one unit, relevant units and add the goods details have to be selected.

Step 16: Click (+) button to add goods details.

Step 17: Click the ‘Save’ button and then the ‘Next’ button.

Step 18: To add the bank account details for credit of budgetary support, the user has to click the ‘bank Details’ tab.

Step 19: Click the ‘Save’ button and then the ‘Next’ button.

Step 20: Click ‘Documents Upload’ tab to upload the relevant supporting documents.

Step 21: Enter the ‘Any other activity undertaken in the State under the same GSTIN’. Click the ‘Submit’ option.

Step 22: On submitting, a success message will pop-up with ARN. The taxpayer can track the application, by clicking the ‘Track Application’ button.

Step 23: Click the ‘Download Summary; icon to view the details of the Units, Goods and bank details.

Response to Query

When the application for registration is sent back by the tax officer to the taxpayer for some query comments, it appears on the Taxpayer’s dashboard.

Step 1: From the ‘Menu’ tab, the user can select ‘Track Application Status’ option. The Track Application dashboard appears on the screen.

Step 2: Click ‘Returned with Comments’ status link. View the ‘Remarks’ of the application appears. The user has to click the ‘Close’ button.