The Hindu Business Line : N-E tobacco units get duty waiver

TOBACCO product manufacturers located in the seven north-eastern States would now be a happy lot. Units that commenced commercial production of products such as cigarettes or pan masala on or after December 24, 1997 and before February 28, 2001 have now been fully exempted from payment of excise duty.

Such units need not also fork out additional excise duty, special excise duty and national calamity contingent duty, according to a revenue department official. The full exemption would be available only if the manufacturing unit meets certain conditions.

Excise exemption to N-E tobacco units was withdrawn retrospectively through Finance Bill 2003, only to be partially restored in August 2003.

The main rider is that the units would be required to invest their entire savings from the exemptions in plant and machinery of a unit located in Arunachal Pradesh, Assam, Manipur, Mizoram, Meghalaya, Nagaland or Tripura.

Further, the investments cannot be withdrawn unless it is for reinvestments in a manner stipulated by the revenue department before the expiry of the period of 10 years from the date of investment. If the investments are withdrawn within the 10-year period, the duty will have to be made good by the companies to the department.

Following industry representation, the Finance Ministry had in August 2003 allowed a 50 per cent waiver on the excise duties that were payable by units in the North-East. This facility also came with the rider that the duty waived would have to be invested by the beneficiary company in the plant and machinery of a manufacturing unit in the region for a period of 10 years.

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N-E tobacco units get duty waiver