A probe conducted by the Siliguri CGST & CX commissionerate has revealed that some companies based in Sikkim have claimed additional refund of GST under the budgetary benefit scheme, amounting to over ₹1,000 crore, since 2017.

“It has come to our notice that some of the business entities in Sikkim have applied for budgetary support at higher rates than the notified rate and have received the same. Such activities of business entities located in the state of Sikkim reveals, prima facie, erroneous claims of refund of budgetary support to the tune of Rs. 1,032 crores,” said a release issued by the commissionerate on Tuesday.

In October 2017, soon after the GST was rolled out across the country, the Cabinet Committee on economic affairs had approved the scheme to provide budgetary support under the GST regime to the industrial units located in Jammu & Kashmir, Uttarakhand, Himachal Pradesh, Sikkim, and other north-eastern states. A budgetary support of ₹27,413 crore was approved for the scheme from July 2017 till March 2027 for such units that used to avail the central excise exemption earlier.

“The decision was made to promote industrialisation in these states and the Centre decided to pay the budgetary support equal to the central share of the cash component of CGST and IGST paid by industrial units concerned and it was estimated that 4,284 eligible units located in these states will get benefit from the scheme,” said
a source.

According to the scheme, the units were eligible only up to the prescribed or notified rate of value addition to avail the benefit.

However, in recent times, the commissionerate in Siliguri got the information that some of the companies in Sikkim were claiming a refund on much higher value addition, which is not allowed in the notification.

“Even some major corporate companies having units in Sikkim are involved in claiming the undue refund under the scheme. A probe has been initiated, and many of these companies have admitted during the summon proceedings that they had applied for budgetary support at a higher rate than the notified rate. The investigation is in progress, and appropriate steps would be taken,” the source added.