Treatment of Industrial Units Availing Exemption Or Reduction in the Rate of Tax Under Erstwhile Act

(1) No industrial unit,- (w.e.f.01.01.2008)
(a) availing benefit of exemption from or reduction in the rate of tax under the erstwhile Act or under the Central Sales Tax Act, 1956 on the turnover of sales or purchase or both as the case may be, before the commencement of this Act; or
(b) which is granted the benefit of exemption from or reduction in the rate of tax on the turnover of sale or purchase or both as the case may be, under the erstwhile Act or under the Central Sales Tax Act, 1956;
shall be permitted to avail the benefit of exemption from, or reduction in the rate of, tax on the turnover of sale or purchase or both as the case may be, on or after the commencement of this Act.
(2) The industrial unit availing the benefit of tax deferment under the erstwhile Act or under the Central Sales Tax Act, 1956 before the commencement of this Act or a unit which is granted facility of tax deferment under the erstwhile Act or under the Central Sales Tax Act, 1956 shall continue to avail the facility of deferment for net tax payable under this Act and the Central Sales Tax Act, 1956, subject to such conditions and restrictions as may be prescribed.
(3) (a) the industrial unit availing or granted benefit of exemption from, or reduction in the rate of tax under the erstwhile Act or under the Central Sales Tax Act, 1956 on the turnover of sales of manufactured goods or turnover of purchase of any raw material, processing material, consumable stores, fuel other than petrol and diesel, lubricant required for use in manufacture of goods or in the packing of goods manufactured by such industrial unit or both, and
(i)whose facility of exemption or reduction in the rate of tax is based on the fixed capital investment as provided under the erstwhile Act or notification issued there under; or
(ii)an industrial unit purchased from the State Government or any corporation or undertaking owned or controlled by the State Government and to whom exemption or reduction in the rate of tax has been granted under the erstwhile Act may apply to the Commissioner for issue of the Certificate of Entitlement in the prescribed form and in prescribed manner. (w.e.f.01.01.2008)
(b) The Commissioner after examining the relevant records and report from the assessing authority and if he is satisfied that the information furnished is correct and complete, shall issue within 60 days from the date of receipt of the application, the Certificate of Entitlement in prescribed form and in prescribed manner containing such particulars as may be prescribed including period of validity of certificate and amount of entitlement if any.
(c) If the Commissioner is satisfied that particulars furnished by an industrial unit in the application is wrong or incomplete or is not worthy of credence, he shall after giving the applicant the opportunity of being heard, reject the application and inform the industrial unit accordingly.
(d) Subject to an appeal to the Tribunal under section 57 the order passed by the Commissioner in this behalf, shall be final.
(4) The industrial unit availing or granted benefit of exemption from, or reduction in the rate of, tax on the turnover of sales before the date of commencement of this Act or an industrial unit which is granted the facility of exemption from, or reduction in the rate of, tax on or after such commencement, on the turnover of sales under the erstwhile Act or the Central Sales Tax Act, 1956, shall be entitled for exemption by way of refund of net tax paid along with the return of tax period in prescribed manner and on fulfilling the conditions that,-
(a) the unit shall hold valid registration certificate issued under this Act or under the Central Sales Tax Act, 1956,
(b) the unit shall have a valid Certificate of Entitlement issued by the Commissioner,
(c) the amount of refund shall not be more than an amount equal to net tax paid for relevant tax period,
(d) the net tax payable has been deposited along with return of tax period in prescribed manner,
(e) the refund shall be subject to the provisions of section 40 except that the amount shall not be adjusted against the admitted tax liability,
(f) the facility of refund shall cease on the day when the amount or the period mentioned in the Certificate of Entitlement, whichever is earlier,
(g) the tax payable on the turnover of sales of goods mentioned in the Certificate of Entitlement and which is manufactured in the industrial unit shall be deducted from the total amount mentioned or described in the Certificate of Entitlement,
(h) the industrial unit has not misused the facility of exemption from or reduction in the rate of tax in any manner.
Explanation: The expression 'net amount of tax payable' means -
(i) the differential amount of tax payable under this Act on the sale of taxable goods other than non-vat goods, manufactured in the unit and input tax credit available to the extent or proportionate to taxable goods other than non-vat goods sold, in case of an industrial unit availing facility of exemption from tax under the erstwhile Act and the Central Sales Tax Act, 1956
(ii) the partial amount of net tax computed under clause (i) above, in proportion to the rate of tax available for exemption to the rate of tax payable under the erstwhile Act, in case of an industrial unit availing benefit of reduction in the rate of tax
(4A) The industrial unit availing or granted benefit of exemption from tax on the turnover of purchase before the date of commencement of this Act shall be entitled for exemption by way of refund of Earned Input Tax Credit computed on the basis of data declared in the documents submitted along with the return of tax period in prescribed manner and on fulfilling the following conditions that,-
(a) the industrial unit shall hold valid Certificate of Entitlement issued by the Commissioner as provided under sub-section (3);
(b) the amount of refund shall not be more than an amount equal to input tax credit earned during relevant tax period,
(c) the refund shall be subject to the provisions of section 40 except that the amount shall not be adjusted against the admitted tax liability,
(d) the facility of refund shall cease on the day when the amount or the period mentioned in the Certificate of Entitlement, whichever is earlier,
(e) the facility of exemption from tax by way of refund shall be available only in respect of raw material, processing material, consumable stores, fuel other than petrol and diesel, lubricant, required for use in manufacture of goods or in the packing of manufactured goods mentioned or described in the Certificate of Entitlement
(f) the amount of exemption from tax by way of refund on the turnover of purchase of goods, shall be deducted from the total amount mentioned or described in the Certificate of Entitlement.
(g) the industrial unit has not misused the facility of exemption from tax in any manner.
Explanation: Earned Input Tax Credit means the amount of admissible Input Tax Credit computed on the basis of data declared in the returns of tax period where industrial unit was availing benefit of exemption under the erstwhile Act.
(5) (a) The amount found refundable shall be refunded within a period of 30 days from the last date of the month in which dealer files the return of relevant tax period. Where the return of tax period is not complete and dealer fulfils the requirement of return on a date later to the due date for filing of return of tax period, such date shall be deemed to be the date of filing of return of tax period.
(b) The amount of refund shall be made in such manner as may be prescribed.
(c) The industrial unit failing to deposit the net tax admittedly payable within prescribed time and in prescribed manner or deposits it after due date, the amount of interest leviable and penalty imposed if any, shall be adjusted and only the balance amount shall be refunded.
(6) (a) The total amount of the refund shall be limited to the extent of the differential amount of the total eligible amount available for exemption or reduction in the rate of tax and the amount availed in exemption or reduction in the rate of tax before the commencement of this Act.
(b) The total period of the refund shall not exceed difference of the total period available for exemption or reduction in the rate of tax and the period exhausted before the commencement of this Act.
(7) If any amount is found refundable and is not refunded within the prescribed time, the industrial unit shall be entitled to simple interest at the rate of twelve percent per annum from the last date prescribed for refund. The amount of interest shall be refunded in such manner as may be prescribed.
(8) The industrial unit availing the benefit of tax deferment as provided under subsection (2) or availing the facility of refund as provided under subsection (4), shall be eligible to issue tax invoices and to claim input tax credit subject to provisions of section 13.The industrial unit availing the facility of refund on both sale and purchase, shall be eligible for claiming Input Tax Credit while computing net tax payable on the turnover of sale of goods described in the Certificate of Entitlement.
(9) Where the amount or the period for exemption or reduction in the rate of tax changes on account of any valid reason or otherwise, the Commissioner shall suo motu or on an application of the industrial unit, amend the certificate of entitlement accordingly.
(10) The facility of refund shall be available under this Act and under the Central Sales Tax Act, 1956.
(11) An industrial unit claiming the refund under this section shall not be deemed to have been assessed based on the returns filed by it and any refund made shall be subject to assessment requiring production of accounts in support of the return filed.
(12) The provisions of this section shall mutatis mutandis apply to those units which were established before 9th November 2000 (the date of reorganization of Uttar Pradesh) and now situated within the territory of Uttarakhand subject to the following conditions;-
(a) the goods are manufactured in a unit established in the State of Uttarakhand having eligibility certificate (validity commencing prior to 9th November 2000) issued under section 4-A of the erstwhile Act for the manufacture of such goods.
(b)such goods are sold for the first time after their manufacture within the period of facility of exemption or reduction in the rate of tax, after bringing them into the State by way of transfer other than sales, by manufacturer having his place of business in the State of Uttarakhand.
(c) valid and genuine certificate issued by the Assessing Authority of the State of UttaraKhand is produced before the assessing authority of the State of Uttar Pradesh indicating therein that the amount has been reduced in the overall limit of exemption or reduction in the rate of tax available to the manufacturer.
(13) Facility of refund of tax under sub section (12) shall be withdrawn, if the certificate referred to in clause (c) of subsection (12) is found false or fake and not issued by the relevant assessing authority of Uttarakhand
(14) On scrutiny of accounts or subsequent investigation it is found that data furnished along with return of the tax period is found wrong or not reliable or based on no genuine material on record, without prejudice to the provisions of section 54, the excess amount refunded shall be deposited within 30days of notice received from the assessing authority along with interest at the rate of 15percent per annum with effect from the date of refund to the date of deposit, failing which the excess amount refunded shall be recovered as an arrears of land revenue.
(15) (a) The Commissioner may by order amend or cancel the Certificate of Entitlement before or after expiration of period of exemption or reduction in the rate of tax, where it is found that-
(i) facility for refund in lieu of exemption or the reduction in rate of tax has been misused in any manner resulting in wrong amount of refund;
(ii) the eligibility certificate issued or facility of exemption or reduction in rate of tax granted under the erstwhile Act has been cancelled or amended by a competent court or an authority;
(iii) the Certificate of Entitlement has been obtained on the basis of mis-representation or concealment of fact:
Provided that no Certificate of Entitlement shall be amended or cancelled without affording opportunity of being heard to the dealer.
(b) The order passed under clause (a) shall take effect from the date mentioned in the order:
Provided that no order passed under this sub-section shall take effect before the date of incidence warranting amendment or cancellation of the Certificate of Entitlement.
(c) Subject to the provisions of sections 57 and 58, the order passed under clause (a), shall be final.*
*Inserted by THE UTTAR PRADESH VALUE ADDED TAX (AMENDMENT) (SECOND) ORDINANCE, 2014 ( U. P. ORDINANCE NO. 6 OF 2014 )