Industrial policy and package scheme of incentives 2013
PSI 2013Coverage – Eligible Industrial Units in Pvt., Co-op, Publicand Joint sector Industries in 1stSchedule of IDR Act 1951 Manufacturing enterprises under MSMED 2006 IT & BT manufacturing units Cold storages Mechanized Food/ Agro processing industries Dairy, Fruit and Vegetable Processing Grain Processing Fish Processing Packed foods Non alcoholic beverages from fruits & vegetables
Area ClassificationNagpur city – DAll other talukas of Nagpur Division exceptGadchiroli district – D+Gadchiroli – NIDNaxal affected talukas - Gadchiroli and Gondia – All talukas Chandrapur- Chandrapur, Gondpipri, Rajura, Korpana,Jiwati, Ballarsha, Pombhurna, Mul and Sawali Bhandara – Sakoli, Lakhandur and Lakhani
Important DefinitionsMega Projects – D, D+ Taluka - 250 Crs or 500 Direct employment Gadchiroli – 100 Crs or 250 Direct employment For employment based Mega Projects – Minimumemployment criterion to be achieved within 2 years formdate of commercial production and to be maintainedthroughout eligibility period. 75% local employment to be provided Investment in CPP not taken in to account for determiningstatus as Mega
Existing Unit:-A unit in production prior to 01.04.2013,orA unit which has been granted EC orhas availed any incentives (Ex St Duty)under earlier scheme, orA unit which has filed a validapplication under PSI 2007 on or before31.03.2013
New Unit :- A unit set up for the first time by anentity in any taluka where there is no Existing Unitset up by the same entity and satisfies followingconditions It is not an Existing Unit At least one of the effective step is completed on or after01.04.2013 It is not formed as a result of re- establishment, mere changeof ownership, constitution or revival of existing unit.
Expansion / Diversification :- Additional FCI on orafter 01.04.2013 for manufacture of same ordifferent products provided, Additional Investment should be more than 25% of GrossFCI of immediate previous year (Min FCI Rs 25 lakhs forMSME and Rs 5 Crs for others) and, Additional FCI should result in increase in capacity by atleast 25% and, Additional FCI should result in increase in employment byatleast 10% .
Effective Steps :- Effective possession of land/ shed/ gala by eligible unit( Physical possession along with registered deed with cleartitle. For MIDC land physical possession with A to L) Constitution - Registration in case of Firm/ Co/ Trust/Society EM, LOI for IT/BT, IEM for LSI, Mega
Fixed Assets :- Land /area in effective possession as required for the project. Cost of development of location Building – B/U area used by the unit including administrativebuilding, residential and industrial housing andaccommodation for all such facilities required formanufacturing process. P & M – Including tools & equipments required and used forworking of unit. Installation & pre operative expenses capitalized. Technical know-how fees Amt paid to MIDC/ MSEDCL for developing infrastructure
Gross FCI :- New fixed assets acquired and paid forprovided, Only new Fixed Assets as per project cost accepted based onappraisal of financial institution and acquired withinstipulated period. For self financed/ NBFC financed project appraisal fromSICOM/ Scheduled commercial bank is necessary. Second hand Imported fixed assets having residual life of atleast 10 years can be considered. Investment in intangible assets including pre- operativeexpenses, interest capitalized, tech know-how, deposits paidfor utility services up to max 10% of project cost.
Financial Incentives (Basket) for NewUnitsArea Ceiling as %of FCINo of YearsMSME LSI MSME LSID 70 40 10 7D+ 80 50 10 7NID 90 70 10 7NaxalAffected100 80 10 7
New MSME/LSI will be eligible for basket ofincentives (IPS, Interest S/S, Power tariff,Strengthening) as % of FCI. Food/ Agro processingunits get 10% higher incentive with one additionalyear of eligibility.Interest S/S :- (MSME) On Term Loan @effective rateof interest (after deducting penal/compound interest,interest receivable under any other scheme) max 5%.Further Interest S/S should not exceed power billduring that year.Power Tariff S/S :- (MSME) @ Rs 1/- PU for 3 years
Incentives for strengthening :- New & ExpansionMSME 5% S/S on capital equipment for Tech up- gradation max Rs25 lacs 75% S/S on expenses on quality certification max Rs 1 lacs 25% s/s on capital equipment for cleaner production max Rs5 lacs 75% s/s on expenses on patent registration max Rs 10 lacs fornational & Rs 20 lacs for international 75% s/s on cost incurred for credit rating max Rs 40,000/-
Incentives for strengthening :- New & ExpansionMSME and LSI 75% of cost of water audit max Rs 1 lacs 75% of cost of energy audit max Rs 2 lacs 50% cost of capital equipment for recycle/ conserve watermax 5 lacs 50% of cost of capital equipment for improving energyefficiency max Rs 5 lacs
IPS for MSMEArea IPSNaxal Affected Net VAT+CST+100% ITCNID Net VAT+CST+ 75% ITCVidarbha Net VAT+CST+65% ITC
Electricity Duty Exemption :- New MSME and LSI for15 years for Vidarbha.Stamp Duty Exemption :- For New as well as forexpansion during investment period (Land & for Loanpurposes) (including assignment of lease rights inIndustrial areas) Notification of R&F Dept is awaited.
Incentives forExpansion/Diversification75% as applicable to new units.For eligibility period less than 1 year as applicable tonew unit.Electricity Duty exemption for 10 yearsStamp Duty exemption during investment period.
Annual Cap on Incentives duringEligibility PeriodIncentives will be disbursed equitably during entireeligibility period of the unit with a provision for carryforward. Total admissibility Rs 1000 for 10 years , unit will be disbursedmax Rs 100 every year Suppose annual basket during 1styear comes to Rs 150, Rs 100will be disbursed and Rs 50 will be carried forward in nextyear If during 2ndyear annual basket comes at Rs 75, total will be75+ 50 = 125, Rs 100 will be disbursed and Rs 25 will be carriedforward to 3rdyear
Application for ECOnly after completion of effective steps but not laterthan 31.03.2018Unit shall acquire and pay for the assets andcommence commercial production within investmentperiod.Delay in production and application will attractprorate reduction in incentives and eligibility period.Investment period will be from date of application orthe date suggested by the unit (within the schemeperiod) for MSME – 3 years For LSI – 4 years
Industrial Policy 2013Secondary Growth Corridor - Mumbai- Nashik-Aurangabad- Amravati- Nagpur Thrust on Food, Agro, Engineering, Electronics and supportservices like logistic and warehousingCritical Industrial Infrastructure Fund – Rs 500 Crsfor last mile infrastructure for MIDC areas. Exhibition cum Convention center at NagpurHelipads in major MIDC areasIncreased FSI in MIDC areas – Additional 0.5 withpremium.
Flatted galas in MIDC areas for MSME10% plot reservation for MSME, out of which 5% forwomen & BC category in New MIDC areasState Cluster development scheme for MSME – 70-80% grant on cost of P& M for CFCs up to Rs 5 Crs.State Mnf. Competiveness Program for MSME-Marketing, Skill Development, Lean manufacturing,Design assistanceModification of seed money scheme on line withPMEGP
Amnesty scheme for closed & unviable units-BTAL permission – Min land area reduced from 10 to5 Hect, Period for usage of land reduced from 15 to 5years.