FinMin disallows area-based exemptions

In a bid to stop misuse of area-based exemptions, the finance ministry has disallowed excise duty exemption to firms undertaking peripheral activities in Himachal Pradesh, Uttarakhand and the North-East.

Non-manufacturing units will now have to pay duty.

In a notification, the government excluded such units from the benefit of area-based exemption with effect from January 18.

"In order to ensure genuine industrial activities in these regions, it has been decided that benefits of duty exemption should not be admissible to goods in respect of which only peripheral activities like preservation during storage, cleaning operations, packing, re-packing, labelling or re-labelling, sorting, alteration of retail sale price etc, take place," the finance ministry said in a release.

The move will ensure that the intended purpose of promoting substantial industrial and manufacturing activities through grant of fiscal incentives is fully met.