Sales Tax Deferment Scheme For Industries, 1987 1. Operative period. 2. Definitions. 3. Applicability of the Deferment Scheme. 4. Deferment of tax on sales. 5. Deferment to new Industrial Units covered by 1985 Dispensation. 6. Deferment for Sick Units. 7. Grant of Eligibility Certificate. 7A. Appeal to the Tribunal. 8. Renewed of eligibility certificate. 9. Breach of conditions. 10. Deferment Is a concession. 11. Review of the Deferment Scheme. Sales Tax Deferment Scheme For Industries, 1987

Made under section 9 of the Central Sales Tax Act, 1956 (Central Act 24 of 1956), and Rajasthan Sales Tax Act, 1954, section 7(2-B), vide Notification No. F. 4(66)FD/Gr.IV/82-72. Dated 26.9.1987: Published In Rajasthan Gazette Extraordinary Part, IV-C(ii). dated 29.9.1987, page 159 (16)

RJ763

S.O. 137. - In exercise of the powers conferred by section 9 of the Central Sales Tax Act, 1956 read with sub-section (2-B) of section 7 of the Rajasthan Sales Tax Act, 1954 the State Government, being satisfied that it is expedient in the public interest so to do, hereby notifies the "Sales Tax Deferment Scheme for Industries. 1987" (hereinafter referred to as the "Deferment Scheme") and allows the industrial units prescribed in this notification to defer the payment of tax on the sales made in the course of inter State trade or commerce of the goods manufactured by them within the State, in the manner, to the extent, for period and subject to the conditions specified in this notification. 1. Operative period. - This Deferment Scheme shall come into operation with effect from the 5th March, 1987 and shall remain in force upto 31st March [1995] 2. Definitions. - (a) "New Industrial Unit" means an industrial unit which commences commercial production during the operative period of the Deferment Scheme but will not include:- (i) an industrial unit established by transferring or shifting or dismantling an existing industry; and

(ii) an industrial unit established on the site of an existing unit manufacturing similar goods.

[Explanation. - Date of commencement of commercial production means the 61st day after the day on which the raw material is, for the first time, put in the process of production including trial production.] (b) "New Industrial Unit covered by 1985 dispensation" means an industrial unit, which commenced commercial production on or after 1st April, 1985 and was entitled for interest free sales tax loan scheme under the 1985 dispensation.

(c) "sick Industrial Unit" means an industrial unit which has incurred cash losses in two complete accounting years immediately before 1.4.1987 and is likely to continue to incur cash losses in the current and/or next financial accounting year and has an erosion on account of cumulative cash losses to the extent of 50% or more of its net worth and being potentially viable is taken up by Central or State level financial institution or a bank, under a programme of rehabilitation.

[(d) "Eligible Area" means the area other than the 'Banned areas']

"Banned Areas" means the areas covered under:-

(i) The urban Agglomeration limits of Jaipur and Kota; and

(ii) Municipal/UIT Limits of all towns:

Provided that industrial units located in the industrial areas developed / financed by the State Government or its Corporations and sick units as defined in clause 2(c) and located anywhere in the State, shall be eligible for deferment provided under this notification. ] (e) "Eligible fixed capital investment" means investment in land, New buildings. New plant and machinery and imported second hand machinery and installation expenditure capitalized for plant and machinery. Capitalised interest during construction not exceeding 5% of the total fixed capital investment. Technical know-how fees or drawing fees paid in lump sum to foreign collaborators or foreign suppliers as approved by Government of India or paid to laboratories recognised by the State Government or Central Government.

Note: (i) Working capital (whether raised through Banks or otherwise and including working capital margin), Goodwill fees, engineering fees, commissioning fees, commissioning expenses, royalties capitalised or otherwise, preoperative expenses, expenditure on trucks, cars, trailers, tractors and transport vehicles and catalysts will not be considered as eligible fixed capital investment for the purpose of this scheme. Plant and Machinery used or installed any where in India and shifted, purchased, leased,licensed or transferred in any manner will not be considered as fixed capital investment eligible for the deferment of tax.

(ii) In the case of new industrial units and units going in for expansion and diversification only those assets which are acquired and paid for during the operative period of this scheme as also during the period from 1.4.85 to 4.3.87 will be eligible for the deferment under this scheme.

(iii) In the case of new industrial units covered by 1985 Dispensation and which have gone into production during the period from 1.4.85 to 4.3.87 only those assets which were acquired and paid for between 1.4.83 and 4.3.87 will be eligible for the deferment under this scheme.

(f) "Expansion" means increase In the value of fixed capital investment by not less than 25% of the net fixed assets of the existing project and accompanied by an increase in the production to the extent of at least 25% of the original licensed/registered capacity:

Provided that "sick units", as defined in clause 2(c) shall be eligible to claim benefits under this scheme. Explanation. - The benefits of Deferment Scheme for expansion projects will be admissible to the eligible units only after they have achieved at least 85% of their licensed / registered capacity. (g) "Diversification" means launching of new product line under the same company, firm or partnership provided that the total fixed capital investment in such a diversification exceeds at least 25% of the value of the original project.

(h) "Pioneering Unit" means the first "new industrial unit" established in any Panchayat Samiti of the State during the above period in which investment in fixed capital exceeds Rs.3.00 crores and the minimum permanent employment is 100 persons.

(i) "Prestigious Unit" means a "new industrial unit" first established in any panchayat Samiti of the State during the above period in which investment in fixed capital exceeds Rs. 10.00 crores with a minimum permanent employment of 250 persons or "new industrial unit" having a fixed capital investment exceeding Rs.25.00 crores and with a minimum permanent employment of 250 persons.

(j) "Ineligible industries" means the industries listed in Annexure B to this notification. The industries listed in Annexure B will not be eligible for deferment of tax:

[Provided that a sick electronic Industrial unit or an electronic unit covered by 1985 dispensation shall not be entitled to the benefits available under the notification.] (k) "Screening Committee for Eligibility Certificates".-In order to avail the facility available under the Deferment Scheme, the applicant industrial unit will have to obtain sanction from the State or District Level Screening committees, as the case may be.

(i) The State level Screening committee which will grant sanction in respect of large scale units will consist of the following: -

1. Secretary, Industries	Chairman
2. Chairman and Managing Director, RIICO	Member
3. Commissioner, Commercial Taxes	Member
4. Director of Industries	Member Secretary.

(ii) The District Level Committee will grant sanction to medium and small scale units and will consist of the following: -

1. Collector (Industries) of the district	Chairman
2. Representative of the Sales Tax Department (nominated by CCT)	Member
3. Branch Manager, concerned of Rajasthan Financial Corpn.	Member
4. General Manager, District Industries. Centre	Member Secretary
5. Representative of RIICO in case of medium scale units where RIICO is the lead institution	Member

Note. - 1. "Small/Medium/Large scale units" would have the same meaning as contained in the definition given by the Government of India from time to time.

2. The State Level Screening Committee would also act as the Monitoring Committee to review the work done by the District Level Committee.

3. Applicability of the Deferment Scheme.- This Deferment Scheme will be applicable:- (i) In the areas mentioned in Annexure A to this notification.

(ii) To new Industrial Unit.

(iii) To new industrial Units covered by 1985 Dispensation.

(iv) To sick units.

(v) To expansion and diversification.

Explanations. - (a) The Industrial units referred to in clauses 2 to 4 above with minimum investment of Rs.10 lacs in fixed assets shall alone be eligible for the benefits under this scheme. (b) The ineligible industries shall not be given any benefit under this notification.

(c) Renovation and rationalization of Industrial Units will not be eligible for deferment of tax under this Scheme. Similarly, replacement of plant and machinery or other assets or change of product mix will not be eligible for exemption from tax.

(d) When a specified manufacturer holding eligibility Certificate under this notification transfers his industry in whole, the transferee shall be eligible for availing of the remaining benefit of the new industry of the transferor, provided such transferee is otherwise eligible and gets eligibility Certificate afresh under this notification.

[(e) Expansion includes the cases of expansion of the industrial units which may earlier have obtained interest free sales tax loan as new units.]

4. Deferment of tax on sales. - (a) An industrial unit, which is granted eligibility certificate under this notification shall be entitled to defer the payment of tax on sales made in the course of inter-State trade and commerce, the goods manufactured by it. The quantum of tax to be deferred and the maximum period of deferment will be as per 'Annexure C': [Provided that mini-cement plants of the capacity limited to 200 tons per day or 66 thousands tons per annum may be entitled to claim exemption from tax to the extent of 50% of its tax liability under the Act with all restriction applicable to an industrial unit as provided in Annexure 'C':] Provided further that the restriction in terms of percentage of fixed capital investment in annexure 'C' shall not apply to an electronic industrial unit given in Annexure 'D' appended to this notification, but the maximum time limit of the benefit for such unit under the notification shall be restricted to Five Years in all cases, except that in case of new pioneering or a prestigious electronic unit, such time limit shall be nine years: Provided further that the extent of deferment of tax shall be restricted to 60% of the tax liability of the expended or diversified capacity in case of expansion of diversification of an electronic industrial unit.] (b) For the purpose of arriving at the limit of tax to be deferred as provided in Annexure 'C' the aggregate of the following shall be considered:-

(i) Aggregate amount of tax which would have been leviable under the provisions of the Rajasthan Sales Tax Act, 1954;

(i) Aggregate amount of tax including surcharge leviable under the provisions of the Rajasthan Sales Tax Act, 1954; and

(ii) Aggregate amount of tax on inter State sales including surcharge, (if payable) on the inter State sales leviable under the provisions of the Central Sales Tax Act, 1956.

(c) An industrial unit claiming deferment of tax under this notification shall not be entitled to claim any deduction, drawback, set-off, partial exemption or refund in respect of purchases made by it. But the concessions provided under section 5C or section 5CC [***] shall be available to such units.

(d) When the limit of quantum of tax to be deferred as prescribed in Annexure 'C' is reached, the industrial unit:

(i) shall pay the deferred tax in the equal half yearly instalments without interest; and the first instalment shall be payable within a period of thirty days from the date of the expiry of eligibility of the benefits under this scheme and subsequent instalments shall be payable at the intervals of the period of six months:

Provided that where any such instalment is not paid in time, the total outstanding deferred amount payable in instalments shall be recoverable immediately as arrears of land revenue with interest at the rate prescribed in the Act from the first day of default of such instalment; (ii) shall pay the current tax as per provisions of sub-section (2-A) of section 7 of the Act.

(e) The deferment of tax referred to above shall be subject to the conditions that the beneficiary industrial unit after having availed the benefits of the Deferment Scheme:

(i) shall continue its production at least for the next 5 years not below the level of the average production for the preceding 5 years; and

(ii) shall not make sales outside the State including branch transfers of the goods manufactured by it exceeding 20% of its total production.

Explanation. - The expression 'sales outside the State' does not include the sale made in the course of Inter-State trade or commerce. (f) As soon as the eligibility certificate for deferment of tax is issued to an industrial unit, all assets of such units shall stand pledged automatically and without any documentation to the Commercial Taxes Department of the State of Rajasthan:

Provided where such assets are already pledged with any financial institution against some loan already sanctioned, the charge of the Commercial Taxes Department shall be deemed pari passu with such institution: Provided further that in cases not covered by the preceding proviso, the Commercial Taxes Department shall have the first charge over the assets of such unit. 5. Deferment to new Industrial Units covered by 1985 Dispensation. - (i) The new industrial units covered by 1985 dispensation as defined in clause 2(b) which have not availed of any interest free sales tax loan so far, will be eligible for the deferment of tax specified in clause 4 provided that the total benefit admissible to small, medium and large industrial units shall not exceed 75%, 50% & 25% respectively of their fixed assets, in five years, from 5-3-1987. The total period during which this benefit will be available to such units shall not exceed five years. (ii) The new industrial units covered by 1985 dispensation which have not availed of any interest free sales tax loan upto 31st March, 1987, shall have an option to avail the benefit of the old scheme at the prescribed scales of the old scheme.

6. Deferment for Sick Units. - Sick units as defined in clause 2(c) will be eligible for deferment of tax at the scale of 75% of the incentives specified in clause 4 above. Further the overall benefit to any sick unit under the Deferment Scheme shall not exceed an amount of Rs. one crore in case of a large scale units, Rs. 50.00 lacs in case of a medium scale unit and Rs.25.00 lacs in case of a SSI unit. 7. Grant of Eligibility Certificate. - (a) An industrial unit eligible for deferment of tax under the Deferment Scheme would be required to make an application in Form 'A' appended to this notification to the member Secretary of the appropriate 'Screening Committee' as mentioned in clause 2(k) within 180 days of the publication of this notification or commencement of commercial production, whichever is later. (b) An industrial unit covered by clause 2(b) opting for the benefit under this Deferment Scheme would be required to convey its option in Form 'A' to the Member Secretary of the appropriate Screening committee as mentioned in clause 2(k) within 150 days of the publication of this notification.

(c) The Screening Committee may pass appropriate orders for sanction/refusal of eligibility certificate in case of sanction of eligibility certificate, such sanction shall be conveyed in writing to the assessing authority concerned who shall issue eligibility certificate in Form B appended to this notification within a period of seven days from the date of the receipt of the sanction.

Explanation. - Where an industrial unit opts for benefits of exemption from tax under the incentive scheme, it shall not be entitled to get benefit under this notification. (d) The benefit of the Deferment Scheme shall be available from the date of the issue of the eligibility certificate.

[(e) An industrial unit covered by this scheme shall not be entitled to claim any benefits under it, if it has been penalized for avoidance or evasion of tax or any case of avoidance or evasion of tax if pending against it, at any forum of hearing]

[Provided that where the offence of avoidance or evasion of tax is technical or venial in nature, the State level Screening Committee in case of large scale units suo motu or otherwise and in case of medium and small scale units on the reference made by the District Level Screening Committee or otherwise, may for reasons to be recorded in writing, waive the condition mentioned in sub clause (e) above.] (f) If an industrial unit has been allowed the benefit of consumption from tax under the incentive scheme, such unit immediately or after completion of one or more accounting year/s, may be permitted by the assessing authority, with the previous approval of the Commissioner, to avail of the proportionate benefit under this scheme and in such case the benefit of exemption from tax already availed of and the benefit of deferment of tax to be allowed under the scheme shall be clubbed together for the purpose of total permissible limit of benefit and all the conditions of this scheme shall mutatis mutandis apply.

[7A. Appeal to the Tribunal. - (a) Any party feeling aggrieved, may file an appeal to the Tribunal against any order of a District Level Screening Committee or the State level Screening Committee within a period of sixty days from the date of communication of the order sought to be appealed against: Provided that the period of limitation in this clause shall be 180 days in case of an appeal being filed by a Commercial Taxes Officer or an Assistant Commercial Taxes Officer. (b) The division or the larger Bench of the Tribunal shall, after giving the parties concerned to the appeal an opportunity of being heard, pass such order thereon as it thinks fit.]

8. Renewed of eligibility certificate. - The eligibility certificate once granted, shall be normally valid for a period of one year. The eligible unit desirous of extending the period of the eligibility would have to apply for renewal of the eligibility certificate in Form A to the Commercial Taxes Officer having jurisdiction not less than one month before the expiry of the eligibility period of the certificate. The Commercial Taxes Officer shall dispose the said application within a period of fifteen days of the receipt of the application. In case the application has not been so disposed within the said period or renewal has not been granted, the applicant shall take up the matter to the appropriate Screening Committee thereafter. The Committee shall generally dispose the application before the expiry of the eligibility period of the original certificate and if necessary direct the Commercial Taxes Officer to renew the certificate. The Commercial Taxes Officer shall act accordingly. Renewal shall be made for one year at a time. 9. Breach of conditions. - (a) An industrial unit covered by the Deferment Scheme shall be subject to all the provisions of the Central Sales Tax Act. 1956 and the rules made thereunder and the terms and conditions contained in this notification. (b) The assessing authority under the Central Sales Tax Act. 1956 having jurisdiction shall either suo motu or on receipt of an application in this behalf, and after affording an opportunity of being heard to the industrial unit, if he is satisfied that a breach of any of the conditions mentioned above has been committed,obtain the prior permission of the CCT before taking legal action under the provisions of the Rajasthan Sales Tax Act, 1954 for the purpose of recovery of deferred tax with interest, as if there was no deferment. The CCT, in case he concurs with the findings of the assessing authority, shall before according such permission to the assessing authority, consult the appropriate Screening Committee.

(c) The Screening Committee shall be empowered to amend, suspend, restore or cancel the sanction for eligibility certificate accorded by it and copies of such orders shall be endorsed to the assessing authority.

10. Deferment Is a concession. - The Deferment Scheme is in the nature of a concession and it shall not confer any right to any industrial unit/ entrepreneur to claim benefit provided for under it. 11. Review of the Deferment Scheme. - The State Government reserves the right to review or amend the scheme as and when needed. [Explanation. - 1. Whenever an industry is included, on any date during the period of operation of this scheme, in Annexure 'B' appended to it, the units of such industry- (a) which have been granted eligibility certificate under this scheme before the said date; or

(b) which have been sanctioned eligibility for the benefits under this scheme before the said date; or

(c) which have started commercial production and the applications thereof are pending on the said date before the appropriate Screening Committee;

shall be entitled to claim full benefits in accordance with the provisions of this scheme.] [2. The benefits allowed under Explanation 1 above shall be available to new units and units which have undergone expansion or diversification as defined in this scheme.] Annexure 'A'- [Omitted]

Annexure 'B'

List of Industries not Eligible for Deferment of Sales Tax [1. All flour mills other than roller flour mill, rice pulses, cereal, spice and sugar mills established at places having a population in excess of 25,000 as per the 1981 Census.]

2. Photographic studios (other than cinematographic studios).

3. Manufacture of ice candy and ice fruits, Ice Kulfi, sweetmeats and arreated waters.

4. Laundry.

5. Tailoring, other than manufacture of ready made garments.

6. Repacking of any goods including medicines, toiletries, pesticides, hervisides, edible products.

7. Production of firewood and charcoal.

8. Decortication roasting, parc11hing, frying oil seeds and colouring decolouring and senting of oil.

9. Preparation of bread, biscuits and bakery products other than by mechansied bakery.

10. [All cement plants (including white cement plants) except those in the small scale sector and except New Industrial Units in the Tribal Sub plan Area.]

11. Saw mills, wooden furniture items.

12. Tin container and similar products using tin sheets and/or metal sheets.

13. All large scale mining and mineral based Industry.

14. Ordinary bricks.

15. Hotel. Motel, Restaurants and catering or eating places.

16. Power intensive units based on electro thermal/electro chemical processes or units where total power requirement exceeds 2500 K V A or contract load and where cost of power is more than 25% of cost of production of the item (s) of manufacture.

17. Khandsari units.

18. Dairy milk powder and other manufacturing product based on milk (except when it is in the Co-operative Sector; however, even in the Co-operative sector, more pasteurisation or sterilisation will not be eligible.

19. Units distilling storing, blending or brewing potable liquor/alcohol.

20. Such other items of which registration is prohibited or registration is restricted as per the advice of DCSSI, New Delhi or for which DCTD Registration/LOI under the Industries Development and Regulation Act is not granted or those units which in barred by the Director of Industries, Rajasthan from time to time.

[21. Oil extracting or manufacturing Industry.] 22. Cotton ginning Industry.

Annexure 'C'

Quantum of Sales Tax Deferment available to units having investment exceeding Rs. 10.00 lacs in fixed assets.

New Units			Expansion/Diversification
S.S.I.	Medium	Time Limit	S.S.I.	Medium Large	Time Limit
1	2	3	4	5	6
100% of fixed capital investment	90% of fixed capital investment	Seven years	90% of fixed capital investment	75% of fixed capital investment	Seven years

Notes: - 1. If a unit reaches the admissible amount mentioned in columns 1. 2, 4 or 5 during the time limit fixed in columns 3 or 6, it shall not be eligible for incentives thereafter.

2. For expansion/diversification, the fixed assets added i.e. new investment in fixed assets made for the purpose of expansion/diversification shall be considered fixed capital investment for the purpose of columns 4 and 5.

3. Sales tax exemption shall be subject to an over all limit of Rs. 4.00 crores in each /any case. The over all limit in case of a pioneering industry shall be Rs. 6.00 crores and in case of a prestigious unit, Rs. 8.00 crores.

4. Time limit indicated in column 3 and 6 shall be extended by two years for units producing pollution control equipments and for pioneering and prestigious units.

5. Sales Tax Exemption will be subject to an over all limit of Rs. 35.00 lacs for Small Scale, Rs. 75.00 lacs for Medium Scale, Rs. 1.00 crore for Large Scale, Rs. 1.25 crore for Pioneering and Rs. 1.75 crore for prestigious units included in the definition of New Industrial Units covered by 1985 dispensation provided for in Clause 2 (b) of the scheme.

6. The units established in the revenue districts of Jaipur, Ajmer, Ganganagar, Pali, Kota, Bundi, Bharatpur. Bikaner, Dholpur, Chitorgarh, Dausa and Baran and which started commercial production before the publication of this notification shall be entitled to the quantum of deferment of tax, which was available in the districts of category II in the existing Annexure 'C' prior to the publication of this notification.

Explanation. - It is clarified that since the inception of the principal Notification and amended from time to time, in case of expansion/diversification only the sales of goods of expanded production or diversified production, as the case may be, shall be entitled to incentive provided for.] Annexure "D"

List of Electronics Industrial Units

Such Schedule already given in 'Sales Tax Incentive Scheme for Industries, 1987', therefore not repeated here. Form 'A'

Application for the Sanction/Renewal of Eligibility Certificate under the Sales Tax Deferment Scheme for Industries, 1987

To, The Member Secretary,

State/District level

Screening Committee,

................................

1. Name of the Applicant.

2. Name & Style under which the applicant carries on business.

3. Status of the applicant such as Proprietor/Manager/Partner/ Director/Karta of the Family.

4. Principal place of business with P.O.. Tehsil and District.

5. Branches, if any, at.

6. Registration Certificate No. under R.S.T. Act and CST Act.

7. Assessing Authority (Name of Circle).

8. Date of commencement of Commercial production.

9. Name of the goods manufactured/ to be manufactured.

10. Period for which Eligibility Certificates of renewal applied for.

11. Basis For Eligibility :

(a) New Industrial Unit.

(b) Sick Industrial Unit.

covered by the 1985 dispensation.

(d) Expansion.

(e) Diversification.

12. Value of Eligible Fixed Capital Investment:

(Complete details of eligible fixed capital investment with proper proof and requirements of the Inventive Scheme should be enclosed with the application).

13. Turnover/Estimated turnover both under RST Act and CST Act for the period applied for.

14. Tax liability from the commencement of the exemption till the expiry date of the last eligibility certificate:

(a) On the sales under the RST Act.

(b) On the Inter-State sales under CST Act.

15. Eligibility Certificate, if any. of the previous year. No. and date and place of issue.

Declaration

1. I/ We hereby opt for the deferment from Sales Tax under the Deferment Scheme. 2. I/ We hereby under take that I/ We shall abide by the terms and conditions contained in the notifications issued under the RST Act and the CAS/CST Act in connection with the Deferment Scheme. Signature of the Applicant(s) and his/their status.

Verification

I/ We verily that to the best of my/ our knowledge and belief the information given above is true and correct and nothing material has been concealed. Place.........

Signature of the Applicant (s) and his/their status.

Date...........

Form 'B'

Eligibility Certificate for Deferment

1. Book No.	.........
2. Serial No.	.........
3. Name of the applicant with status	.........
4. Name and Style of the business with full address	.........
5. Principal place of business with branches, if any	........
6. Basis for Eligibility
(a) New Industrial Unit
(b) Sick Industrial Unit
(c) New Industrial Unit covered by 1985 dispensation
(d) Expansion
(e) Diversification
7. Valid From to
(subject to maximum limit of exemptions under the Notification)