Jammu and kashmir

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Querist : Anonymous

Querist : Anonymous (Querist)

12 March 2013 Can any one guide me about the calculation of excise duty of units located in J&K

Thank you in advance

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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15 March 2013 sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the Schedule appended hereto, other than goods specified in Annexure appended hereto, and cleared from a unit located in the State of Jammu and Kashmir, from so much of the duty of excise leviable thereon under any of the said Acts as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization of CENVAT credit under the CENVAT Credit Rules, 2002.

calculator is here :

http://www.eximguru.com/calculator/calculatecustomduty.aspx?1=65&hscode=1509

Querist : Anonymous

Querist : Anonymous (Querist)

15 March 2013 yes i have read this, but sir my question is 39% refund of what ?

1. the whole excise duty on sales OR
2. the duty paid in cash OR
3. the duty on value addition

and how it is written as 100% excise duty exemption for new investment in J&K.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 The calculation and refund of excise duty for units located in Jammu & Kashmir (J&K) are governed by special provisions under the law due to the region's unique economic and political status. Here's a detailed breakdown:

### **1. Excise Duty Exemption and Refund in J&K**

**Excise Duty Exemption:**
- **100% Excise Duty Exemption:** This means that new units or investments in J&K can avail of full exemption from excise duty on their production. This applies to goods produced in the unit and sold from J&K.

**39% Refund of Excise Duty:**
- The **39% refund** relates to the excise duty paid in cash. This refund is provided under the special scheme for units located in J&K, and it is meant to offset the duty paid on the production of goods.

#### **To Address Your Questions:**

1. **Refund Calculation:**
- **39% Refund of What?**
- **Duty Paid in Cash:** The 39% refund is calculated on the excise duty paid in cash. It does not include the duty that is exempted under the 100% excise duty exemption scheme but rather applies to the amount of duty actually paid out of pocket by the unit.

- **Not on:**
- **Whole Excise Duty on Sales:** The refund is not on the total excise duty on sales but rather the cash paid out as excise duty.
- **Duty on Value Addition:** It does not directly relate to value addition but rather the cash duty paid.

2. **100% Excise Duty Exemption:**
- For new investments or units in J&K, the 100% excise duty exemption means that the production is entirely exempt from excise duty. This is typically a significant benefit to attract new industries to the region.

### **How It Works in Practice:**

- **Initial Phase:** When a unit sets up in J&K, it may be exempt from excise duty on its production, which means it does not have to pay excise duty at the time of manufacture.

- **Refund Phase:** If the unit has paid excise duty in cash, it is eligible for a refund of 39% of that amount. This refund is essentially a cash benefit to reduce the effective cost of production.

- **Documentation:** The process usually involves filing claims and providing documentation to the relevant excise authorities to prove the amount of excise duty paid and the eligibility for refund.

### **Practical Steps:**

1. **Confirm Eligibility:** Ensure that the unit meets all the criteria for 100% exemption and 39% refund as specified under the applicable schemes.

2. **Maintain Records:** Keep accurate records of all excise duty payments and sales.

3. **Apply for Refund:** Submit the necessary claims for refund with the excise authorities, along with supporting documents.

4. **Consult Authorities:** For the most accurate guidance, consult with the local excise authorities or a tax professional experienced in J&K’s special provisions.

This framework is designed to support and incentivize businesses in J&K, given its strategic importance and historical economic challenges.