Whereas the Governor of Himachal Pradesh is satisfied that it is necessary and expedient so to do in the public interest;

Now, therefore, in exercise of the powers conferred under first proviso to subsection (5) of section 62 of the Himachal Pradesh Value Added Tax Act, 2005, the Governor of Himachal Pradesh, in supersession of Notification No. EXN-F(11)-5/2004, dated 19.01.2006, is pleased to direct that henceforth the tax exemption under section 6 of the aforesaid Act on the sale of goods manufactured by the dealers running any new industrial unit located in category 'C' areas shall be admissible as per table and subject to the conditions specified below:-

Quantum of Value Added Tax and Central Sales Tax incentives

Conditions of eligibility

1. Quantum of the incentive would be available on the Value Added Tax and Central Sales Tax payable in the period of exemption;

2. Fixed Capital Investment (FCI) shall mean the investment incurred on Building, Plant and Machinery;

3. The availment of incentives shall cease either on the exhaustion of the applicable quantum or on the completion of the eligible period, whichever is earlier;

4. The actual Fixed Capital Investment (FCI) as reflected in the Financial Institution/Bank Appraisal Project Report shall have to be certified by a Chartered Accountant;

5. If any false declaration is given for the purpose of availing incentives or if the unit is found not eligible, the amount of incentives so availed shall be liable to be recovered along with interest and penalty;

6. The eligible unit has obtained a certificate in Form 'I' as prescribed at Annexure 'A' appended to this notification from the General Manager, District Industries Centre of the Department of industries, Himachal Pradesh where the industrial unit is registered or in other case from the Director of Industries, Himachal Pradesh or his nominee duly authorized, in writing, in this behalf, and has furnished the same certificate to the Assessing Authority for the grant of the certificate in Form 'E' appended as Annexure 'A' to this notification;

7. These incentives shall commence only after the unit commences commercial production;

8. Government of India is in the process of introducing a uniform Goods and Services Tax (GST) regime throughout the country. In this event the benefits so granted or being availed shall be subject to modification/s by the State Government to bring it in conformity with the GST regime;

9. All the goods should not only be manufactured but also sold by the dealers (manufacturers) themselves and it shall not be open for finished goods purchased or acquired by concerned industrial units for re-sale in Himachal Pradesh;

10. The unit must have been registered as a dealer under the Himachal Pradesh Value Added Tax Act, 2005, for manufacture of goods for sale;

11. The unit (registered dealer) shall comply with the provisions of the Himachal Pradesh Value Added Tax Act, 2005, the Central Sales Tax Act, 1956, and the rules, including the scheme, if any made, the notification, and orders issued, under the said Acts ;

12. The unit is located in the Category 'C' areas and employs at least 70 percent of its total manpower employment from amongst the bonafide Himachalis. In case of any violation of this condition at any point of time during this period by the concerned Industrial Unit, no further exemption shall be admissible to it and in such an event all incentives already availed by such unit shall be recovered and such unit shall be liable for action under the Act;

13. Any dealer who was enjoying the benefit of exemption under Notification No. EXNF(1)2/2004(i), dated 30.03.2005 issued under section 42 of the Himachal Pradesh General Sales Tax Act, 1968 and Notification No. EXN-F(11)-5/2004 dated 19.01.2006 of the Himachal Pradesh Value Added Tax Act, 2005, and who would have continued to be eligible for such exemption on the date of the commencement of this notification shall continue to avail the benefit of the exemption from payment of tax on the sale of manufactured goods for the unexpired period as per conditions applicable under the above said notification;

14. The unit must have been granted the certificate in Form 'E' by the Assessing Authority as appended to this notification as Annexure 'B'

15. The certificate in Form 'E' is continue to be operative and has not been withdrawn or cancelled by the prescribed authority or is not annulled or quashed in any appellate, revisional or other proceedings.

Explanation I.- The employment condition specified under condition No.12 above shall not be applicable to new industrial units employing only one employee located anywhere in the tax free industrial zone and the units which are self-employed ventures where the owner is running the unit without employing any manpower:

Explanation II – For the purposes of this notification,--

(i) "Category 'C' areas" as specified in Annexure 'C' appended to this notification means all tribal areas notified by the competent authority and includes all Tribal Development Blocks and Development Blocks mentioned under this category in the Rules Regarding Grant of Incentives, Concessions and Facilities to Industrial units in H.P. 2004;

(ii) 'New industrial unit' means an industrial unit located in Himachal Pradesh which commenced/ commences commercial production on or from the date of this notification, whichever is later, but shall not include any industrial unit which is formed as a result of re-establishment, mere change of ownership, change in the constitution, re-structuring or revival of an existing industrial unit ; and

(iii) The unit has not been included in the negative list. The expression 'negative list' shall have the same meaning as assigned to it by this Department Notification No.EXN-F(1)2/2004 (iii) dated 30th March, 2005.

Annexure-'A'

Form-I

[See Condition No. 6]

CERTIFICATE

No. ……………………

This is to certify that ________________________ (name and full address)______________________ the/Proprietor/Managing Director/partner whereof is /are Shri/Shrimati __________________ is/are registered as an existing industrial unit or new industrial unit in the office of the undersigned against Registration No. __________________ dated________for the manufacture of ______________________ for sales, and that the said industrial unit commenced manufacture of the goods with effect from ___________.

2. This is further to certify that the said new industrial unit is an industrial unit ___________(description of the unit) other than the industrial unit specified in the negative list.

3. This is also to certify that the said existing/new industrial unit located in _______________which is in the Category 'C' area (Partial tax exempted zone).

4. This is also to certify that the aforesaid existing/new industrial unit is employing_______________ persons and of these persons_______________persons i.e. __________% are bonafide Himachalis.

5. This is also certified that the aforesaid existing/new industrial unit is a self employed venture

6. The dealer is entitled to partial exemption limited to Fixed Capital Investment (FCI) made and for payment of VAT and CST as specified below or for a period of 7 years (whichever is earlier) as the industrial unit of the dealer is located in category 'C' areas.

Quantum of VAT/CST incentives

(Quantum of VAT/CST incentives is as above. Make necessary entry in the blank column above as is applicable)

Note:- This certificate shall be signed and issued by the General Manager, District Industries Centre of the Department of Industries of Government of Himachal Pradesh where the Industrial Unit is registered or in other cases by the Director of industries, Himachal Pradesh or other competent authority, as the case may be.

Annexure-'B'

Form-'E'

[See Condition No. 14]

(To be issued by the appropriate Assessing Authority of the District concerned)

No. ____________________

This is to certify that __________________ (name of the dealer with place of business), who has furnished a certificate in Form I from the specified authority has been registered as a dealer under the Himachal Pradesh Value Added Tax Act, 2005 against Registration Certificate No._______in _______ district and the dealer is an industrial unit located in category 'C' areas having total investment in Plant & Machinery of Rs.___________ and is covered by para ___________ (specify the para of the Notification) of the government of Himachal Pradesh, Excise and Taxation Department, Notification No. __________dated_____________.

This is to further certify that subject to the compliance of terms and condition specified in the above notification, the dealer is entitled to partial exemption limited to Fixed Capital Investment (FCI) made and for payment of VAT and CST as specified below or for a period of 7 years (whichever is earlier) as the industrial unit of the dealer is located in category 'C' areas.

Quantum of VAT/CST incentives

(Quantum of VAT/CST incentives is as above. Make necessary entry in the blank column above as is applicable)

This certificate shall be valid from _________ to _______

Annexure –'C'

[See Explanation –II]

By Order,

Principal Secretary (E&T) to the

Government of Himachal Pradesh