Sikkim Firms Under GST Probe for Overstated Refund Claims Exceeding ₹1,000 Crore

The Central GST and Central Excise Department’s Siliguri unit has uncovered significant discrepancies in GST refund applications submitted by multiple industrial units in Sikkim. Preliminary investigations reveal that these firms may have claimed refunds totaling approximately ₹1,032 crore at value addition rates higher than those officially prescribed under the Centre’s Budgetary Support Scheme.

Introduced in July 2017, the scheme aimed to support industrial units in select regions—including Sikkim—by refunding the central share of CGST and IGST paid, compensating for the excise duty exemptions they lost with the implementation of GST. The scheme allocated ₹27,413 crore to benefit over 4,000 eligible units until March 2027.

However, recent findings suggest that some Sikkim-based firms have submitted refund claims based on inflated value addition rates, violating the scheme’s terms. Even large corporations operating in the state have been implicated.

Several companies have reportedly admitted during inquiries that they applied for support at higher-than-notified rates. The investigation is ongoing, and authorities have indicated that appropriate actions will be taken against the involved entities.

The Budgetary Support Scheme was designed to provide financial relief to units that previously enjoyed excise duty exemptions under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, and similar packages for special category states. 

This development underscores the need for stringent monitoring and compliance mechanisms to ensure that such support schemes are utilized appropriately and that any misuse is promptly addressed.