The finance ministry has notified an excise duty refund scheme for cement and steel used in construction of houses for rehabilitation of tsunami victims.
The notification No 32/2005, dated August 17, 2005, comes almost eight months after the killer tsunami hit some districts in Tamil Nadu, Andhra Pradesh, Kerala and Union Territories of Pondicherry and the Andaman and Nicobar Islands.
Although the notification says the government exempts cement and steel used in the construction of houses in the tsunami-affected districts, the procedures require the manufacturers to clear cement and steel only on payment of full excise duty and the education cess.
Non-government agencies or private enterprises or voluntary agencies or private public enterprises or rehabilitation organisations or trusts or any agencies approved by the states or Union Territories concerned, who purchase the cement or steel on full duty payment, have to submit a statement of quantity and value of the said goods used in construction of such houses along with documents showing payment of duty on the said goods to the deputy/assistant commissioner of central excise, in whose jurisdiction the area, where such houses are being constructed, is situated.
They have to file a claim for refund of the duties paid on the said goods procured and used in construction of such houses on a quarterly basis, along with a consumption certificate for the said goods from a chartered engineer countersigned by the district collector or sub-divisional magistrate concerned and completion certificate from the district collector to the jurisdictional excise officer, within 60 days from the end of the relevant quarter, or such period may be extended by the jurisdictional excise officer by another 60 days.
The assistant/deputy commissioner of central excise shall, after satisfying himself that the said goods have been used for the specified purposes, and on production of documentary evidence about the duty paid on the said goods, sanction the refund claim, at the rate of 6 per cent of the cost of construction of such house or houses, as the case may be, subject to a maximum of Rs 9,000 per house constructed, to the approved construction agency.
The refund scheme seems a reluctant step when compared to the steps taken by the Atal Bihari Vajpayee government when Gujarat suffered devastation because of earthquake in 2001.
The Vajpayee government exempted from excise duty cement and steel supplied to the Gujarat government or the Gujarat State Civil Supplies Corporation, whereas the present government gives refund of only 6 per cent of the construction cost or Rs 9,000, whichever is less to the approved construction agencies.
The procedures for availing the exemption were much simpler than those prescribed under the present refund scheme.
The Vajpayee government announced exemption for steel and cement for the purpose of reconstruction or repair of private buildings, residential or non-residential, for earthquake victims; under the present refund scheme the approved agencies get limited refund only for the purpose of construction.
The Vajpayee government notified the exemptions within four months; the present government has taken almost eight months.
The scheme for tsunami victims is available only for houses constructed between April 1, 2005 and July 31, 2006; the exemption scheme for earthquake victims was available for almost three years -- till March 31, 2004. The government could have announced a grant rather than a corruption-prone and cumbersome refund scheme.
