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Financial Incentives in Industrial Policy of Maharashtra, 2013
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Financial Incentives in Industrial Policy of Maharashtra, 2013

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Please Find attached herewith the document containing various financial incentives for industries in Industrial Policy of Maharastra, 2013

Please Find attached herewith the document containing various financial incentives for industries in Industrial Policy of Maharastra, 2013

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  • 1. nITIN pahilwaniChartered AccountantsfINANCIAL iNCENTIVESiNINDUSTRIAL POLICY OF MAHARASTRA, 2013MAY, 2013
  • 2. 1. Introduction _________________________ 12. Eligible Industrial Units ________________________ 13. Financial Incentives3.1 Mega/Ultra Mega Projects ____________________ 33.2 Large Scale Projects ____________________ 53.3 Medium and Small Enterprise ____________________ 84. Monetary Ceiling ________________________ 12TABLE OF CONTENT
  • 3. P a g e | 1In order to encourage the dispersal of industries to lesser developed areas of the State,the Government has been giving package of incentives to New Industrial Units /Expansion Units set up in the developing regionsIn the light of the Industrial Policy of -2013 and introduce a new “Package Scheme ofIncentives 2013”, containing details of eligibility criteria, quantum of incentives andmonitoring mechanism for administering the incentives during the period up to the31st March, 2018.1. Industries listed in the First Schedule of the Industries (Development andRegulation) Act, 1951, as amended from time to time2. Manufacturing Enterprises as defined in the Micro, Small and MediumEnterprises Development Act, 2006. (MSMED Act, 2006)3. Information Technology Manufacturing Units registered with the Directorate ofIndustries or the Maharashtra Industrial Development Corporation (MIDC) or theDevelopment Commissioner, Santacruz Electronic Export Processing Zone(SEEPZ) or Software Technology Parks of India (STPI) in the State.4. Bio-technology Manufacturing Units as specified by the Government from timeto time, which are outside the purview of any registering authority mentionedabove.5. Cold Storages6. Mechanized Food/Agro Processing Industries in the following sectors:· Dairy, Fruit and Vegetable Processing.· Grain Processing.· Fish Processing.· Consumer foods including Packed foods.· Non alcoholic beverages from fruits and vegetables.7. Central Public Sector Units which satisfy the qualifying criteria as defined in Parabelow.INTRODUCTIONELIGIBLE INDUSTRIAL UNITS
  • 4. P a g e | 2Micro, Small and Medium Manufacturing Enterprises (MSMEs)MSMEs shall be construed as per their definition in the Micro, Small and MediumEnterprises Development Act, 2006. (MSMED Act, 2006)Large Scale UnitsIndustrial Units, having investment more than the Medium Manufacturing Enterprisesas defined under the MSMED Act, 2006, but less than the Mega Projects defined below,shall be classified as Large Scale Units (LSI)Mega Projects / Ultra Mega ProjectsIndustrial Units satisfying the minimum threshold limits of Fixed Capital Investment orDirect Employment prescribed in the following table shall be classified as MegaProjects/ Ultra Mega Projects.The investment in Captive Power Plant shall not be considered for determining thequalifying criteria for eligibility as Mega Project/Ultra Mega Project.Type of unitTaluka/ AreaClassificationMinimum FixedCapitalInvestment (Rs.Crore)Minimum DirectEmployment(No.)Mega ProjectA & B 750 1,500C 500 1,000D & D+ 250 500No IndustryDistricts & NaxalismAffected Area100 250Ultra MegaProjectEntire state 1,500 3,000
  • 5. P a g e | 3FINANCIAL INCENTIVESFORMEGA / ULTRA MEGA PROJECTS
  • 6. P a g e | 4FINANCIAL INCENTIVES FOR MEGA PROJECTS/ ULTRA MEGAPROJECTSThe quantum of incentives for Mega Projects and Ultra Mega Projects shall be decidedby the High Power Committee under the chairmanship of the Chief Secretary,Government of Maharashtra on a case to case basis. However the Cabinet SubCommittee for Industry, under the chairmanship of the Chief Minister of Maharashtrawill have the powers to sanction customized package of incentives and even offerspecial / extra incentives for prestigious Mega Projects / Ultra Mega Projects, on a caseto case basis.
  • 7. P a g e | 5FINANCIAL INCENTIVESFORLARGE SCALE PROJECTS
  • 8. P a g e | 6Industrial Promotion SubsidySr.No.Taluka/Area Classification The Industrial Promotion Subsidy Every Year1. Naxalism affected area100% VAT on local sales minus Input TaxCredit (ITC) or zero whichever is more + CSTpayable2.No Industries Districts,Vidarbha and Marathwada90% VAT on local sales minus ITC or zerowhichever is more + CST payable3.Group D+ Taluka (Other thanSr. No. 1 and 2)80% VAT on local sales minus ITC or zerowhichever is more + CST payable4.Group D Taluka (Other thanSr. No. 1 & 2)70% VAT on local sales minus ITC or zerowhichever is more + CST payable5. Group C Taluka60% VAT on local sales minus ITC or zerowhichever is more + CST payableExemption from Electricity DutyAll Eligible New Units in Group C, D, and D+ areas and No-Industry District(s) andNaxalism affected Area will be exempted from payment of Electricity Duty duringeligibility period not exceeding 15 years.In Group A and B areas, 100% Export Oriented Units (EOUs), Information TechnologyManufacturing Units and Bio-Technology Manufacturing units will also be exemptedfrom payment of Electricity Duty for a period of 7 Years.Waiver of Stamp DutyNew Units as well as Units undertaking Expansion/ Diversification will be exemptedfrom payment of Stamp duty during the Investment period in Group “C, D, D+ Talukas,No Industry Districts and Naxalism affected areas.
  • 9. P a g e | 7However, in Group A and B areas, stamp duty exemption would be available as givenbelow:· BT Manufacturing and IT Manufacturing Units in Public Parks : 100%· BT Manufacturing and IT Manufacturing Units in Private Parks : 75%· Mega Projects - 50% for first conveyance deed onlyOther IncentivesLSI and Expansion thereof will be eligible for the following incentives in all categories ofareasi. 75% of cost of Water Audit limited to Rs. 1.00 lakh.ii. 75% of cost of Energy Audit limited to Rs. 2.00 lakh.iii. 50% of the cost of Capital Equipment under the measures toConserve/Recycle Water, limited to Rs. 5 lakhiv. 50% of the cost of Capital Equipment for improving Energy Efficiency,limited to Rs. 5 lakh.
  • 10. P a g e | 8FINANCIAL INCENTIVESFORMEDIUM SMALL AND MICROENTERPRISE [MSME’s]
  • 11. P a g e | 9Industrial Promotion SubsidySr.No.Taluka/Area Classification The Industrial Promotion Subsidy Every Year1. Naxalism affected areaVAT on local sales minus Input Tax Credit (ITC)or zero whichever is more + CST payable +100% of ITC2.No Industries District VAT on local sales minus ITC or zerowhichever is more + CST payable + 75% of ITC3.Entire Vidarbha andMarathwada (Other than Sr.No. 1 & 2.)VAT on local sales minus ITC or zerowhichever is more + CST payable + 65% of ITC4.Group D+ Taluka(Other than Sr.No.1 and 3)VAT on local sales minus ITC or zerowhichever is more + CST payable + 50% of ITC5. Group C TalukaVAT on local sales minus ITC or zerowhichever is more + CST payable + 40% of ITC6.Group B Taluka VAT on local sales minus ITC or zerowhichever is more + CST payable + 20% of ITCInterest SubsidyAll eligible new Micro, Small and Medium Manufacturing Enterprises in areas otherthan Group “A” will be eligible for interest subsidy upto 5% p.a. The quantum ofinterest subsidy payable every year will not exceed the bills paid for electricityconsumed during the relevant year.Exemption from Electricity DutyAll Eligible New Units in Group C, D, and D+ areas and No-Industry District(s) andNaxalism affected Area will be exempted from payment of Electricity Duty duringeligibility period not exceeding 15 years.In Group A and B areas, 100% Export Oriented Units (EOUs), Information TechnologyManufacturing Units and Bio-Technology Manufacturing units will also be exemptedfrom payment of Electricity Duty for a period of 7 Years.
  • 12. P a g e | 10Waiver of Stamp DutyNew Units as well as Units undertaking Expansion/ Diversification will be exemptedfrom payment of Stamp duty during the Investment period in Group “C, D, D+ Talukas,No Industry Districts and Naxalism affected areas.However, in Group A and B areas, Stamp Duty exemption would be available as givenbelow:· BT Manufacturing and IT Manufacturing Units in Public Parks : 100%· BT Manufacturing and IT Manufacturing Units in Private Parks : 75%· Mega Projects - 50% for first conveyance deed onlyPower Tariff SubsidyEligible New Micro, Small and Medium Enterprises (MSME) will be eligible for powertariff subsidy. The subsidy will be to the tune of Rs 1/- per unit for the Units located inVidarbha, Marathwada, North Maharashtra and the Districts of Raigad, Ratnagiri andSindhudurg in Kokan Region and Rs 0.50 per unit for the Units in other areas of theState for a period of 3 years from the date of commencement of commercialproduction, for the energy consumed and paid. The Units in Group “A” areas willhowever not be eligible for this incentive.Incentives for Strengthening MSMEsThe followings incentives shall be admissible to the MSMEs and LSIs so as to promoteQuality Competitiveness, Research & Development, Technology Upgradation, Water &Energy Conservation, Cleaner Production Measures and Credit RatingA. New MSMEs and Expansion thereof in all categories of areas will be eligible forfollowing incentivesi. 5% subsidy on capital equipment for Technology Up–gradation, subject toa maximum of Rs.25 lakhsii. 75 % subsidy on the expenses incurred on Quality Certification limited toRs. 1 Lakh.iii. 25% subsidy on capital equipment for Cleaner Production measures,limited to Rs.5 Lakhs
  • 13. P a g e | 11iv. 75 % subsidy on the expenses incurred on Patent Registration limited toRs. 10 Lakh for the National Patents and Rs. 20 lakhs for the InternationalPatents.B. Incentives for Credit Rating of MSMEs in all categories of areas75% of the cost of carrying out Credit Rating by Small IndustriesDevelopment Bank of India/ Government accredited Credit Rating Agency,limited to Rs. 40,000.C. New MSMEs and Expansion thereof will be eligible for the following incentives inall categories of areasv. 75% of cost of Water Audit limited to Rs. 1.00 lakh.vi. 75% of cost of Energy Audit limited to Rs. 2.00 lakh.vii. 50% of the cost of Capital Equipment under the measures toconserve/recycle water, limited to Rs. 5 lakhviii. 50% of the cost of Capital Equipment for improving Energy Efficiency,limited to Rs. 5 lakh.For Expansion and Diversification UnitsExisting/New Micro, Small and Medium Manufacturing Enterprises, LSI (includingManufacturing IT/BT) Units, qualifying as Expansion/Diversification Units, will also beeligible to get the Incentives for Expansion /Diversification, equivalent to 75% of theincentives admissible for New Units. The eligibility period for availing of the incentiveswill however be reduced by one year in case of Expansion/Diversification Units.
  • 14. P a g e | 12New MSME/LSI Units will eligible for a basket of incentives mentioned in above Paras,the total quantum of which will be linked to the Fixed Capital Investment.Talulka/AreaMicro, Small & MediumEnterprisesLarge Projects (LSI)Ceiling as % ofFixed CapitalInvestmentNo. ofYearsCeiling as % ofFixed CapitalInvestmentNo. ofYearsA -- 7 -- 7B 20 7 -- 7C 40 7 30 7D 70 7 40 7D+ 80 7 50 7No IndustryDistrict90 7 70 7NaxalismAffected Area100 7 80 7The total quantum of incentives for the Food /Agro Processing Units will be 10% overand above the limits mentioned above and such units will get one more year ofeligibility to avail of the incentives.MONETARY CEILING
  • 15. P a g e | 13Nitin PahilwaniChartered AccountantEmail: ntpahilwani@yahoo.com / ntpahilwani@gmail.comhttp://in.linkedin.com/in/ntpahilwaniThe information contained herein is of general nature and is not intended to address thecircumstances of any particular individual or entity. Although I endeavor to provide accurate andtimely information, there can be no guarantee that such information is accurate as of the date it isreceived or that will continue to accurate in future. No one should act on such information withoutappropriate professional advice after a thorough examination of the particular situation.