Indirect Tax Newsletter

INDIRECT TAX

Denial of benefit of Area-based Exemption under excise-regime no reason to restrict 'Budgetary-Support'

The Delhi HC in Special Cables Pvt. Ltd.¹, held that the 'budgetary-support' benefit under the Scheme of Budgetary Support under Goods and Services Tax Regime to units located in the State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim ("Scheme") cannot be denied to an eligible unit merely because such unit was denied the benefit of 'Area-based Exemption' under Notification No.50/2003-CE dated 10.06.2003 ("Notification").

The Bench observed that Para 4.1 of the Scheme sets out two conditions for a unit to qualify as an 'eligible unit' – (a) It was eligible to avail the benefit of central excise exemption, under the Notification mentioned in Para 2 of the Scheme, before 01^st July, 2017; and (b) It was availing such exemption immediately before 01^st July, 2017. The Bench also observed that the orders