67.     Treatment of tax incentive cases:

          1)       Where any unit is availing a tax holiday on the date of commencement of the Act, it shall be treated as converted as the unit availing tax deferment.  The balance period available as on 31st day of March 2005 to such units shall be doubled. The eligibility amount shall be the balance available to such unit as on that date. Balance period means the difference of period between date of completion of eligibility shown in the certificate of eligibility and 1st day of April 2005.

          2)       The units already availing tax deferment prior to commencement of the Act, shall continue to be eligible to avail the balance amount available as on 31st day of March 2005 and for the period as mentioned in the eligibility certificate.

3)         The tax payable and the tax to be claimed as deferment for each period shall be   the net tax (i.e. output tax less input tax) which shall be debited to the eligibility amount. (..)

        (The words “Wherever the input tax exceeds output tax for a tax period and the deferment unit made any export sales or sales in the course of exports in the same tax period, the unit shall carry forward such excess input tax upto the month of March every year and shall be eligible to claim refund in the tax return for the month of March every year”  deleted by GO MS No 2201 dt 29th Dec 2005 w.e.f 1-4-2005)

ILLUSTRATION:

CDL Industries was granted tax holiday for a period of 7 Years from 10-10-1999 for an amount of Rs.65, 22,000.  As on 31-03-2005, the dealer has availed an amount of Rs.45, 10,000.

The period originally availed is 5 (five) years, 5(five) months and 21 days.  The period of availment prior to 01-04-2005, when worked out on doubling the same, is 10(ten) years (11) months and 12 days.  Deduct this period form total period of 14 (fourteen) years, as availed to the Units under Deferment Scheme originally.  The balance period to be availed after 1-4-2005 is 36 months and 18 days.  As per the above sub-rule (1) of this Rule, the dealer now is eligible to avail Tax Deferment for the balance amount of Rs.20,12,000/- for a period of 36 months and 18 days i.e. 01-04-2005 to 18-04-2008.

The amount of deferment, availed for each year, shall be paid after the end of the period of availment to the dealer after the conversion form Tax holiday Scheme to Deferment Scheme.

The Calculation is as follows:

1. Actual period of availment under

   Tax Holiday Scheme                           : 10-10-1999 to 9-10-2006

            2. Period left as on 01-04-2005               : 01-04-2005 to 9-10-2006

            3. Period left                                                     : 1 Year 6 months 9 days

            4. Period doubled as per rule                             :  3 Years and 18 days

5.  Period up to which the unit is

Eligible for incentive                                    :  18-4-2008

 6.  The Month & year in which the Tax

     Availed in the year 2005-2006 is payable        :  May 2008

7.     The month & Year in which the Tax

      Deferment availed in subsequent

      Year is payable                                           : May 2009 and so on.                                                                                      

(The illustration is substituted by G.O MS No. 503 Rev (CT-II) Dept, dated 08-05-2009 w.e.f 01-05-2009. The original illustration reds as “Illustration:

                   CDL Industries was granted tax holiday for a period of 7 years from 10-10-1999 to 09-10-2006 for an amount of Rs.65,22,000/-As on 31-03-2005, the dealer has availed an amount of Rs.45,10,000/-.

                   The period originally available as on 01-04-2005 is 18 months & 9 days.  As per the above sub-rule the dealer now is eligible to avail tax deferment for the balance amount of Rs.20,12,000/- for a period of 36 months and 18 days i.e. 01-04-2005 to 18-04-2008.

                   The amount of deferment availed for each month shall be paid at the end of fourteenth year i.e. the amount of tax deferred for the month of April 2005 shall be paid on or before 30th April 2019.) 

4)     Where any VAT dealer is availing deferment, a declaration in Form 502 shall be filed for every tax period in addition to the return in Form VAT 200.

5)     The amount availed in the first year, in which the unit is converted from Tax holiday Scheme to Deferment Scheme, shall be paid in the month succeeding the month in which the period for which the Unit is eligible for availment of the incentives is completed and the amount availed in the second year, shall be paid in the year, subsequent to the year in which the amount, availed in the first year is paid or payable and son on.         

(The sub-rule (5) was added by G.O MS No. 503 Rev (CT-II) Dept, dated 08-05-2009 w.e.f 01-05-2009.)

1(6)   Any industrial unit that availed deferment of tax under any order issued   by   the   Government   either   before   or   after   the commencement  of  the  Act,  may  be  allowed  to  pay  the  net present value of such deferred tax availed by such industrial unit by  calculating  the  same  at  a  discounted  rate,  as  may  be prescribed by the Government from time  to time by way of a notification.

1(7)  The industrial unit, opting for prepayment of deferred tax under sub-rule (6) may file an application exercising its option before the Commissioner.

1(8)  On receipt of the application from the industrial unit exercising the option for prepayment of deferred tax under sub-rule (6), the Commissioner may accept such prepayment of the deferred tax.

     1. Ins. Vide GOMS 109 dated 19-02-2013 with effect from 20-02-2013.