Government of Jammu and Kashmir Finance Department

Sub: State Freight Refund Scheme, 2018. Ref: Budget announcement 2018-19.

Government Order No: y II -FD of 2018 Dated: 25 - 09 - 2018

In order to provide support to the industrial units located in the State for transporting manufactured goods outside the state of Jammu and Kashmir beyond 1000 kilometres, sanction is hereby accorded to the promulgation of the scheme as per Annexure-A to this order with effect from 1st April 2018.

By order of the Government of Jammu & Kashmir.

Sd/- (Navin K. Choudhary), lAS

Principal Secretary to Government Finance Department

No. ETlEsttJ07 12018 Dated:-25-09-20 18 Copy to the:-

1. All Financial Commissioners. 2. Principal Resident Commissioner, J&K, New Delhi. 3. Principal Secretary to Hon'ble Governor. 4. All Principal Secretaries to Government. 5. All Commissioner/Secretaries to Government. 6. Divisional Commissioner, Jammu/Kashmir. 7. Excise Commissioner, J&K, Srinagar 8. Commissioner, Commercial Taxes, J&K Srinagar. 9. Additional Commissioner, Commercial Taxes Tax Planning, J&K. 10. Additional Commissioner, Commercial Taxes (Adm) Jammu/Kashmir. 11. Pvt. Secreta ry to Hon'ble Advisor (V). 12. President Kashmir Chamber of Commerce & Industry, Kashmir. 13. President Federation of Industry, Kashmir. 14. President Chamber of Commerce & Industry, Jammu. 15. President Industries Association Bari Brahmana/Samba. 16. President Tax Bar Association, Jammu/Srinagar. 17. General Manager, Government Press, Jammu/Kashmir. 18. Private Secretary to Principal Secretary to Government, Fin 19. Government Order file/Stock file/Incharge website.

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Annexure-A

1. Short title and commencement-

(i) This scheme shall be called the State Freight Refund Scheme, 2018.

(ii) It shall come into operation w.e.f 01.04.2018.

2. Coverage-

(i) Unless otherwise specified, the scheme will cover all industrial units in the State of Jammu & Kashmir.

3. Definition-

(a) 'Existing Industrial Unit' means an industrial unit where manufacturing activity has commenced before the date of operation of the Scheme and is formally registered as on 07/07/17 with the Department of Industries and Commercel Directorate of Handicraftsl Handloom except the units manufacturing goods mentioned in Annexure-I to this order"

(b) 'Finished Goods' means the goods actually produced by an industrial unit for which it is registered.

(c) 'Industrial Unit' means an industrial unit where a manufacturing activity is carried on.

(d) 'Manufacturing Activity' means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term "manufacture" shall be constructed accordingly.

(e) 'New Industrial unit' means an industrial unit where manufacturing activity has commenced on or after the date of operation of the Scheme.

(f) 'Raw materials' means any raw material actually required and used by an industrial unit in manufacturing of the finished goods for which it is registered.

(g) 'Registered Capacity' means "capacity for which the unit has been registered with the Industries & Commerce Department of State Government.

(h) 'Scheme' means the State Freight Refund Scheme 2018.

(i) 'State' means state of Jammu and Kashmir.

'2.

U) 'Substantial Expansion' means an increase of at least 25% of the registered capacity of the industrial unit through additional capital investment. However, if such increase is due to merger/amalgamation of two or more industrial units, it will not be considered as substantial expansion for the purpose of the Scheme.

4. Duration- Before conclusion of the financial year the Finance Department will review the scheme and determine whether to continue the scheme in the next financial year.

Provided that the scheme shall cease to exist from the date the Central Government launches a new scheme on Transport/Freight Refund whichever is earlier.

5. Ineligible industries/ goods/ movements (Negative List)- (1) The Industrial units/ items listed in Annexure-I of this notification will not be eligible for subsidy under the Scheme.

(2) Unless otherwise specified, subsidy under scheme will not be applicable to industrial units for movement of raw material and finished goods within the State.

6. Applicability-Unless otherwise specified,

i. This scheme is applicable to all industrial units, both in the public and the private sectors irrespective of their size, located in the state and which commence commercial production within the period of validity of the scheme.

ii. Refund under the scheme will be admissible to eligible industrial units as per the condition laid down in para 4.

iii. Existing eligible industrial units are also eligible for refund under the scheme in respect of the additional transport costs of finished goods arising as a result of substantial expansion or diversification effected by them after the commencement of the scheme. Refund in such cases will be restricted to the transport costs of the additional finished goods produced as a result of the substantial expansion or diversification.

iv. The scheme shall be available to only those industrial units who provide employment to permanent residents of the state of Jammu & Kashmir as per the guidelines of the Industrial Policy 2016.

7. Quantum of Refund-(1) Unless otherwise specified, the quantum of subsidy to the industrial units located in the State is 100 % for transporting their manufactured goods beyond 1000 kilometers outside the state.

8. Registration under the Scheme- All registered units with Department of Industries & Commerce/ DICJ/ DICK would be eligible under the Scheme. This registration would be sufficient for claiming refund. For such units which are not registered as mentioned above shall follow the following:-

(1). Industrial units, desirous of claiming subsidy under the scheme, shall get registered with the District Industries Centre concerned, prior to the date of commencement of its commercial production for new industrial units or before taking substantial expansion of existing industrial unit.

(2). The General Manager of the District Industries Centre concerned shall be the competent authority to issue Registration Certificate. No industrial unit should be registered for benefits of this scheme, if such industrial unit is covered under negative list given at Annexure -I of this notification.

9. Submission of claim under this scheme-(1) The industrial unit claiming refund under the Scheme shall submit its claims in the prescribed application form, as applicable from time to time, to the District Industries Centre concerned; along with requisite documents, within one year from the date of incurring expenditure on freight of finished goods beyond 1000 kilometers outside the state on which refund is being claimed by it. The documents which are required to be submitted with each claim application are listed in Annexure-II of this notification. In addition, the documents which are required to be submitted only with the first claim under the scheme are listed in Annexure -III of this notification.

(2) The number of refund claims under this scheme preferred by an industrial unit shall not ordinarily exceed one every Quarter. However Director of industries and Commerce may at his discretion entertain more number of claims in a quarter year, if the financial position of the industrial unit so warrants.

10. Role and functions of Director Industries & Commerce--- (1) He / She shall ensure that at least one meeting of the Divisional Level Committee shall be held in every quarter to avoid accumulation of the claim cases.

(2) Shall ensure 30% audit of all claims under State Freight Refund Scheme cleared by Divisional Level Committee by his/her office before disbursement

11. Role of General Manager District Industries Centers--- He / She shall verify the claim documents and give its recommendations for placing the case before Divisional Level Committee Meeting. The agenda note for the Divisional Level Committee giving details of the claim cases as

per Annexure-IV shall be circulated at least 15 days in advance to all the members of Divisional Level Committee.

12. Role of Divisional Level Committee-----(1 )The Divisional Level Committee of respective Directorates of Industries and Commerce, Jammu & Kashmir, with the following composition shall sanction the incentive under State Freight Subsidy Scheme 2018 for disbursement by the General Manager Concerned.

i. Director, Industries and Commerce -------------- Chairman ii. Joint Director (Dev), Directorate of I&C----------- Member iii. Chief Accounts Officer Directorate of I&C------- Member iv. Deputy Director (Planning), Directorate of I&C--- Member v. General Manager DIC Concemed----------- Member secretary

(2) The committee shall meet once in a quarter for each district in the division. The Concerned General Manager shall submit the case to the Director, Industries & Commerce within a period of 21 days after its receipt and shall be disposed of by the divisional level committee within one month.

s

ANNEXURE-I

NEGATIVE LIST FOR FREIGHT REFUND SCHEME, 2018

1. The following Industrial Units will not be eligible for benefits under Freight Refund Scheme, 2018

(i) Plantations, Refineries and Power generating units:

(ii) Units not complying with environmental standards or not having applicable Environmental Clearance from M/o Environment & Forests (MoEF) or State Environmental Impact Assessments Authority (SEIAA) or not having requisite consent to establish and operate from the concerned Central Pollution Control Board/State Pollution Control Board also will not be eligible for subsidy under the scheme.

(iii) Any other Industry/activity through a separate notification as and when considered necessary by the Government. It will be effective from the date of such notifications.

2. The following finished goods will not be eligible for benefits under Freight Subsidy Scheme, 2018

(i) All the commodities attracting SGST rate 14% including tobacco and manufactured tobacco substitutes.

(ii) All the commodities attracting SGST rate 0%. (iii) All the non GST commodities including Alcohol for human consumption (iv) Pan Masala (v) Plastic carry bags of less than 20 microns as specified by the Ministry of

Environment and Forests Notification No. S.D. 705(E) dated 02.09.1999 and S.D. 698 (E) dated 17.06.2003.

(vi) Arms, their accessories and ammunition. (vii) Rectified spirit and Methylated spirit. (viii) Oleo-resin. (ix) Twisted ribbed bars manufactured out of untwisted ribbed bars. (x) Repacked goods (xi) Bricks and Tiles (xii) Soft drinks (xiii) Edible Oil and Vanaspati ghee (xiv) Screen printing of glazed tiles (xv) Cutting stitching of doormat out of coir, jute and decor (wall to wall) (xvi) Cutting of marble/granite (except locally extracted and processed marble

stones) (xvii) Sweetmeats (excluding toffees candy etc.) (xviii) Cycles/Tricycles

(xix) Televisions, Air Conditioners, Refrigerators and Washing Machines, when assembled and manufactured by the industrial units located in the State and sold under the brand name of other products.

(xx) Products manufactured by hot mix plants (xxi) Cutting and grinding of glass, itching silvering, bevelling, frosting and

designing of glass. (xxii) Incandescent bulbs (xxiii) Tea (processed/ unprocessed (xxiv) Iron & Steel (xxv) Locally extracted Marbel and Granite stones .

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ANNEXURE-II

Check-list in which the unit will report to the DIC at the time of each claim of Refund under Freight Refund Scheme, 2018

1. Name & address of unit 2. Period of claim. 3. Date of receipt of the claim at District Industries Centre. 4. Physical verification report of DIC 5. Statement showing utilization of raw material and finished products

manufactured during the claim period. 6. Statement of finished goods transported to places outside state during the claim

period. 7. GST return of relevant period. 8. Affidavit stating that the unit has not claimed subsidy from any other source. 9. Balance sheet for the relevant period showing carriage. 10. Power bills and proof of payment for the relevant period. 11. CA certificate in respect of Raw Material & Finished Goods for the relevant

period. 12. N.O.C from Pollution Control Board for the relevant period. 13. Receipt from transporters for carrying goods (manufactured) for the relevant

period. 14. e-way bills (hard copy) duly endorsed by the consignee to the effect that the

goods have been delivered and accounted for. 15. Challan and consignment note for finished goods dispatched. 16. Employment certificate from Competent Authority along with list of employees. 17. Affidavit by the unit certifying registration no. of trucks carrying manufactured

goods from the unit for the relevant period. 18. (a) Attested copies of RC of vehicles transporting manufactured goods from the

unit and route permit issued by Transport Department or authentic Govt. documents incorporating the truck no. (b) Valid Railway documents in case of transportation through railways.

19. Has the unit undergone expansion? If so, new capacity assessment certificate to be attached.

20. Bank statement for payment made to transporters during the period (payment by cheque only).

21.ls there any multiplicity of claim for the same period?

ANNEXURE-III

Check-list in which the unit will report to the DIC at the time of

first claim under Freight Refund Scheme, 2018

1. Name & address of unit 2. SSI/E M registration 3. Date of physical inspection 4. Transport subsidy registration certificate, if it does not possess SSI/EM/UA

registration 5. Date of 18t commercial production 6. GST Registration No. 7. Income tax registration No. 8. PAN Card no. in the name of the unit 9. List of Board of Directors/Partners (along with PAN card no.) 10. Articles of Memorandum of Association/Partnership Deed 11. Company registration certificate 12. Land Documents 13. Power Development Department's power sanction letter & NDC for installation

of DG set if applicable 14. Bank Account No. & name 15. Capacity assessment certificate issued by General Manager DIC or any other

designated officer in their behalf 16. Factory license No. & date 17. N.D.C. from local authority where ever applicable (Gram Panchayat, Municipal

Corporation etc.) 18. N.D.C. from Mines & Minerals Department if applicable 19. Distance eligibility certificate for Road/Rail from competent authority 20.ls the unit covered in negative list?

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ANNEXURE-IV

CHECKLIST IAGENDA NOTE FOR DIVISIONAL LEVEL COMMITTEE ON FREIGHT REFUND SCHEME-

S.No. Particular 01. Name and address of the unit 02. Period of claim 03. Date of receipt of the claim at DI&CC 04. Date of received of the claim in DI&C 05. Application Form of the unit with date and signature 06. Enquiry Report of DI&CC 07. SSI/IEM Registration Certificate OB. Transport Subsidy Registration Certificate 09. Date of 1 st Commercial Production of the unit 10. Annexure-I [Statement of Raw Materials (RM) purchased] 11. Annexure-II [Statement showing the utilization of raw materials and

Finished Products (FM) Manufactured during the claim period] 12. Annexure-III (Statement of Finished Goods transported to places outside

NER! within NER during claim period) 13. GST Registration No. 14. GST Return of relevant period 15. Income Tax Registration Certificate & Clearance Return submitted 16. PAN Card 17. Railway Freight Certificate for relevant period, if applicable 1B. Capacity Assessment Certificate with quantum of F.G. produced per limit

consumption of power and diesel to be specifically mentioned in the joint assessment report, facilitating examination of claim on the basis of these parameters

19. Road distance certificate from competent authority!e-way bills as per norm (i.e when invoice value is more than Rs.50000!-)

20. Employment certificate from competent authority 21. List of Employee (s) 22. Affidavit as per prescribed format (by unit) 23. List of Board of Directors! Partners 24. Article of Memorandum of Association! Partnership Deed 25. Company Registration Certificate 26. Upto date balance sheet showing carriage inward and outward 27. State Electricity Board! Power Department power sanction letter and NOC

for installation of D.G. Set, If applicable 2B. Power bills and receipt for concerned period 29. Statement showing month wise output and diesel and power consumption,

rating of the DG Set (KVA), diesel consumption and hours run.

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4,0. Factory license (Upto date) '31. Chartered Accountant Certificate 32. Land Documents 33. NOC/ Consent from Pollution Control Board 34. NOC from local authority (GaonPanchayat Secretary/ GaonBurah,

Municipal etc.) 35. Bank statement for payment made to transporters during the period

(Payment only by cheque) 36. Bank Alc No. and Name 37. Bills & Challans for raw materials purchased (from the RM supplier) 38. Receipt from Transporters for carrying RM 39. Bills and Challan consignment note for finished goods dispatched 41. In case of excisable goods produced by the unit Certificate from Excise

Department showing the quantity cleared on quarterly basis. Excise Payment challan; Refund statement showing quantity and value

42. In case of local sale, detailed address of purchasers with payment receipt details (cash/ chequeetc) CA certificate on the body of the statement

43. In case of purchase of RM from outside NER and from within NER: Copy of challan and Consignment Note of transporter endorsed to purchaser

44. In case of Finished Products sold outside NER or within NER: Copy of C-Form against the consignment sold to the party & Photocopy of consignment note acknowledged by the purchasers