No excise exemption to peripheral units in HP, Uttarakhand

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New Delhi, Jan 20 (UNI) The Centre has withdrawn the excise duty exemption to industrial units involved only in peripheral activities in Himachal Pradesh and Uttarakhand.

Such units cannot claim exemption from January 18 this year, the Finance Ministry said.

The Central Government has amended provisions vide Notifications No.1/2008-Central Excise (C.E.), No.3/2008-C.E.[N.T.] and 4/2008-C.E.[N.T.] to exclude the benefit of area-based exemption in Himachal Pradesh and Uttarakhand to those units which undertake only peripheral activities, the Ministry said.

Notification Nos.49/2003-C.E. and 50/2003-C.E., both dated June 10, 2003, provide full exemption from excise duty to the units located in specified areas of Uttarakhand and Himachal Pradesh.

These exemptions are intended to encourage industrial development by creation of basic infrastructural facilities and to generate employment opportunities for the local people of these states.

In order to ensure genuine industrial activities in these regions, it has been decided that benefits of duty exemption should not be admissible to goods in respect of which only peripheral activities like preservation during storage, cleaning operations, packing, re-packing, labeling or re-labeling, sorting, alteration of retail sale price etc. take place.

This will ensure that the intended purpose of promoting substantial industrial/manufacturing activities through grant of fiscal incentives is fully met. Even in respect of special category states in the North-east (States of Assam, Tripura, Meghalaya, Mizoram, Manipur, Nagaland, Arunachal Pradesh and Sikkim), the benefit of excise duty exemption has been disallowed to units carrying out only such peripheral activities.

Accordingly Notification Nos. 49/2003-CE and 50/2003-CE have been amended vide notification No. 1/2008-CE dated the January 18, 2008 so as to exclude certain peripheral activities from the operation of these notifications.

The benefit of the said notifications will not, therefore, be available to goods which have been subjected to only one or more of the following processes such as packing or re-packing of such goods in a unit container or labeling or re-labeling of containers, declaration or alteration of retail sale price, etc. In other words, units carrying out only such processes would not be eligible for exemption benefit and would be required to pay duty as per normal procedure.


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