Case Law Details
Hero Motocorp Ltd. Vs. Union of India (Supreme Court of India)
The Hon’ble Supreme Court of India in M/S Hero Motocorp ltd. v. Union of India & ors. [Civil Appeal No. 7405 of 2022] held that the assessee established its units in North Eastern and the Himalayan States based on the Office Memorandum of 2003 and it was not any kind of promise that was done by the Central government during the pre-GST regime. Therefore, a 100% exemption cannot be granted to the assessee based on this memorandum. Moreover, the Apex Court also suggested that the assessee can approach the respective state government and GST council for representing this matter.
Facts:
During the pre-GST regime, the Government of India issued an offering memorandum of 2003 (“O.M”) which provided that new industrial units and existing industrial units on their substantial expansion in the States of Uttaranchal and Himachal Pradesh, would be entitled to exemption of 100% outright central excise duty for 10 years from the date of commencement of commercial production. Further, the said O.M. also provided that there shall be a 100% income tax exemption for such units initially for five years and thereafter 30% for companies and 25% for other companies for a further period of five years, from the date of commencement of commercial production.
M/S Hero Motocorp ltd (“the Appellant”) established a new industrial unit for the manufacture of motorcycles at Haridwar, Uttarakhand, and commenced commercial production dated April 07, 2008, therefore, the Appellant had this exemption till the year 2018. But, since the GST regime came into the picture, they availed the exemption only up to July 01, 2017. Thereafter, the benefit enjoyed by the Appellant was reduced to 58% through the Budgetary Support Policy vide Notification no. 10(1) 2017-DBA-II/ NER dated October 05, 2017. Under this scheme, it is provided that the reimbursement will be done of the Central share of Central Goods and Services Tax (“CGST”) and Integrated Goods and Services Tax (“IGST”) to the affected eligible industrial units for the residual period in the North Eastern and the Himalayan States. The Central share was determined at 58% of CGST and 29% of IGST.
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