Page 207 - GSTL_2nd April 2020_Vol 35_Part 1

2020 ] HERO MOTOCORP. LTD. v. UNION OF INDIA 109
benefits under the earlier excise duty exemption/refund schemes but has
otherwise no relation to the erstwhile schemes.
1. 2 Units which were eligible under the erstwhile Schemes and were in
operation through exemption notifications issued by the Department of
Revenue in the Ministry of Finance, as listed under para 2 below would be
considered eligible under this scheme. All such notifications have ceased to
apply w.e.f. 1-7-2017 and stands rescinded on 18-7-2017 vide Notification
No. 21/2017, dated 18-7-2017. The scheme shall be limited to the tax which ac-
crues to the Central Government under Central Goods and Service Act, 2017 and
Integrated Goods and Services Act, 2017, after devolution of the Central tax or the
Integrated tax to the States, in terms of Article 270 of the Constitution.
3. SHORT TITLE AND COMMENCEMENT
3.1 The scheme shall be called Scheme of Budgetary Support under Goods
and Services Tax (GST) Regime to the units located in State of Jammu &
Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States includ-
ing Sikkim. The said Scheme shall come into operation w.e.f. 1-7-2017 for an
eligible unit (as defined in para 4.1) and shall remain in operation for resid-
ual period (as defined in para 4. 3) for each of the eligible unit in respect of
specified goods (as defined in para 4.2). The overall scheme shall be valid
upto 30-6-2027.
3.2 OBJECTIVE :
The GST Council in its meeting held on 30-9-2016 had noted that exemption
from payment of indirect tax under any existing tax incentive scheme of
Central or State Governments shall not continue under the GST regime and
the concerned units shall be required to pay tax in the GST regime. The
Council left it to the discretion of Central and State Governments to notify
schemes of budgetary support to such units. Accordingly, the Central Gov-
ernment in recognition of the hardships arising due to withdrawal of above exemp-
tion notifications has decided that it would provide budgetary support to the eligi-
ble units for the residual period by way of part reimbursement of the Goods and
Services Tax, paid by the unit limited to the Central Government’s share of CGST
and/or IGST retained after devolution of a part of these taxes to the States.
x x x
5. 2 The above 58% has been fixed taking into consideration that at present Cen-
tral Government devolves 42% of the taxes on goods and services to the States as
per the recommendation of the 14th Finance Commission“
(emphasis supplied)
22. Under the aforesaid Scheme, for the remaining period, the units can
only claim refund of taxes pertaining to just the Union Government’s share of
CGST (58%) and IGST (29%). Petitioner is peeved that the units that were eligible
in various exemption notifications under the erstwhile regime have been granted
only partial benefit as against 100% benefit. It contends that the policy decision
arrived at vide Office Memorandum dated 7-1-2003, entitles them to grant com-
plete benefit under the Budgetary Support Scheme. In our view there is funda-
mental fallacy in the contention. We do not perceive that the Petitioner has any
vested right to be entitled to budgetary support of entire CGST and IGST. The
industrial policy of Respondent No. 1 to grant area-based exemption has under-
gone complete change. Consequently, the exemption granted under the Central
Excise Exemption Notification giving effect to the said policy has also lost its rel-
evance and is no longer in force. We cannot now selectively concentrate on the
GST LAW TIMES  2nd April 2020  271