ELIGIBILITY CRITERIA & REQUIREMENTS FOR FULFILMENT BY COMPANIES APPROACHING FOR SANCTION AND DISBURSAL OF SPECIAL INCENTIVES/BENEFITS

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Cecily Grant
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1 ELIGIBILITY CRITERIA & REQUIREMENTS FOR FULFILMENT BY COMPANIES APPROACHING FOR SANCTION AND DISBURSAL OF SPECIAL INCENTIVES/BENEFITS Sl. Requirements Para No. G.O. No. Provisions 1. Unit should be an industrial unit with investment of Rs.200 Cr. or more including hospitals, medical/dental colleges, educational institutions and shopping village projects in rural areas. 2. Unit should be in the Private Sector or the Joint Sector (in which Government or Govt. Undertaking s capital is 49% or less) Para 4 Para 4 as 1500/ (M)/2014 of Para 2.1 and Para Units may include expansion/diversification cases Para 4 Para All benefits to be available to greenfield, brownfield and Para 5 Para 3.0 expansion/diversification units 5. Mega Projects in 200 Cr. to less than 500 Cr. category would be provided all financial benefits as described in the IIIP-2012 with suitable conditions, but no such benefits will be provided that are not covered in IIIP Para 4(Ka) Para The maximum financial limits of such cases can be relaxed by Cabinet on the recommendation of the EC on case-to-case basis. 7. Allotment of land, Power connection, etc,. will be made available to such projects in Fast Track Mode. 8. Full or partial bearing of expenditure by Government to infrastructure related facilities related to establishment of such mega projects can be considered Para 4(Ka) Para 3.7 Para 4(Ka) No provision in Policy Para 4 (Ka) No provision in Policy 9. Mega Project undertaking capital investment of Rs.500 Cr. or more would be eligible for, apart from the benefits admissible to mega projects in the Rs. 200 Cr. or higher category, such benefits that are not covered by the IIIP Such projects to include skill enhancement and skills development projects. Par 4(Kha) & (Gha) Table 3 Para 3.3 & 3.7 1

2 10. For such units where the total capital investment is Rs Cr. or higher, a new category called Super Mega Projects is created. For such projects, following additional special benefits will be provided under certain conditions: To lend flexibility in benefits provided to Super Mega Projects, the companies will be free to opt for the benefits to the extent of the yearly limit and ovarall period ceiling, under the heads of: Para / (M)/13TC (Mega) dated Table 3 Para 3.3 (i) 100% reimbursement of VAT/CST/GST (State Share) (ii) Capital interest subsidy on entire loan for more than 5 years (iii) Infrastructure interest subsidy. 11. Various benefits will be provided up to 300% of capital investment for units to be set up in Poorvanchal, Madhyanchal & Bundelkhand regions and up to 100% for units to be set up in other regions, subject to the condition that yearly benefits shall not exceed 100% of the VAT/CST & GST (State Portion) deposited in the State Government s account 12. In Super Mega category completion of capital investment of Rs Cr. and commencement of commercial production of any one phase would be pre-requisite for eligibility for special benefits. 13. In the absence of departmental policy pertaining to investments in mega projects in any department, mega projects defined in para 5.7 of the Infrastructure & Industrial Investment Policy, 2012 would apply. Par 2.1 (Ba) Para 2.2 Para 4 (Kha) 510/ (M)/13TC (Mega) dated 510/ (M)/13TC (Mega) dated as 1500/ (M)/2014 of Table 3 Para 3.3 Para 2.12 No provision in Policy 2

3 14. All GOs issued by various departments would be considered amended so as to include mega projects undertaking expansion and diversification. 15. Investment in land, building, plant & machinery and other capital assets shall be included in the computation of capital investment. Plant & machinery means new plant and equipment including equipment, humidifier, generating set, boiler, captive power plant, apparatus, components, and such other new plant & machinery items as are in accordance with the nature of the unit and use of which incidental to production. Para Para 6 402/ (M)13 of read with para of 770/ (M)/13 TC dated New Industrial Policy has come into force, therefore, other department will have to issue their GOs accordingly Table 2 Para The fiscal benefits provided under the special benefits and facilities to mega or super mega units would be admissible on capital investment done after the cut-off-date. 17. Cut-off date means the period commencing from the date opted for by the unit (being a date falling between the cut-offdate, and the date of issuance of LOC) and ending in 5 years in case of mega projects in the 200 Cr. to less than 1000 Cr. category, and 7 years in case of mega projects in the category of investment of Rs Cr. or higher, for making the prescribed investment and commencement of commercial production. Para 7 Para 7 Para 1.2 GO no. 402/ (M)-13 of 2052/ (M)/13 TC dated Para 2.5, 2.8 &

4 18. Eligible beneficiary units undertaking expansion or diversification shall have to maintain separate accounts for their projects. If however it is not possible to do so, the assessment of special benefits will be done on the ratio of additional capital investment to total capital investment. There would be no limits on the number of times expansion/diversification is undertaken within the eligibility period but it will be subject to the condition that reimbursement of VAT/CST/GST payable on the turnover of base production would not be admissible. Para 3 Amended by Para 1 GO 510/ (M)/13 TC (Mega) of GO 2052/ (M)/13 TC Para Turnover of base production means, in case the unit has been in production for the previous 5 years or less, the maximum turnover in any year in that period year period means the 5 years preceding the financial year in which date of first phase commercial production falls after the cut-off-date, i.e Para 2.15 & At application stage, all Mega/Super Mega projects can choose one of two options for claiming reimbursement as under: Para 5 G.O. no. 510/ Amount of net VAT remaining after deducting ITC in pro rata proportion of production sold within the State and outside the State shall be eligible for reimbursement, OR Amount of VAT/CST/GST deposited in State Govt. account would be admissible as eligible amount. Related to VAT regime, but not applicable now Para

5 22. Conditions: Copy of letter of interest/iem filed with DIPP, GOI to be made available to Nodal Agency. Para / (M) 13 of as para of G.O. 770/ (M)/13 TC dated Sl No 8 of Annexure 1 & 3 of 23. Investment (including in nature of advances) prior to cut-offdate ( ) not to exceed 15% of estimated cost of project. Para 12.2 Para Cost of land purchased prior to cut-off-date or cost of land and building purchased from Government Agency/FI/Scheduled Commercial Bank (except a RRB) not to be counted in the fixed capital investment Not relevant 25. Fixed capital investment to be computed from cut-off-date till date of commencement of commercial production Para 12.3 Para 2.7 & s for benefits should be accompanied by DPR prepared by External Consultants/Chartered Accountants firms. Para 12.6 Para / (M)/13 TC (Mega) dated Sl No 11.9 of Annexure 3 of 5

6 27. If project is established in phases and commercial production accordingly commences on different dates, then special benefits will be admissible only if project is being set up at one location, the DPR clearly mentions the setting up of project in phases, and appraisal is based on such DPR, and the product manufactured is of similar nature. Condition is that unit should have commenced commercial production of the last phase within 5 year period from the date of LOC, and has completed the necessary capital investment pertaining to its eligibility as mega project from the cut-off-date till prior to starting commercial production of the last phase. The admissible benefits as mega project in this situation would be made available to the unit from the date of having complete the necessary capital investment on condition that unit should have commenced commercial production of at least one phase. Provided that such mega/super mega units (including expansion/diversification units) which have been granted stamp duty exemption facility, will not be bound by the condition of completing the necessary capital investment, but shall be made available the benefit under the condition/arrangement provided in the G.O. No. 141/ (M)/05 dated LOC to be issued for providing special benefits in connection with Mega Projects and commercial production to commence within 5 years of the LOC date Para 12.7 r/w Para r/w Para 1.2 Para 12.5 to be read with G.O. dated G.O. dated r/w G.O. No. 854/ (M)/13 TC (Mega) dated para 7 (ibid) Para 2.3 Para Para 1.2 G.O. No. 2052/ (M)/13 TC dated

7 29. Appraisal Note to be provided within 6 months of date of LOC. To be prepared by Scheduled Commercial Bank (except RRBs) or FIs under control of such Banks or a FI under control Central Government; required even if no loan for project is envisaged. 30. Correctness of the capital investment to be certified by company s authorized Director and Statutory Auditors. 31. Assessment & verification of the factual position of capital investment as per certificates provided to be done by PICUP by its empanelled valuers/ca./consultants. Proposed at the Disbursement Stage. Para 12.4 Para 12.4 Para / (M)/13 TC (Mega) dated Sl No 1(iii) of Annexure 4 of Sl No 1(iv) of Annexure 4 of Para PICUP to get Nodal Officers appointed for different mega project for setting up inter departmental coordination and resolution of problems being faced by the project in a timely manner. 33. Unit, after fulfilling conditions contained in LOC shall apply in prescribed format to the Authorized Agency. Para 13.7 Para 14.1 Para 4.10 Annexure 4 of Para 1.4 G.O. no.510/ (m)/13 TC (Mega) dated 7

8 34. At the stage of disbursement of benefits, the capital investment shall be certified by company s Statutory Auditors. Para 12.4 G.O. No. 402/ (M)/13 dated Sl No 1(iv) of Annexure 4 of 35. PICUP to get the assessment and verification of the correctness of capital investment by its panel valuers/ca/consultants and put up proposal through the IDD to the EC. Para Para 12.4 Para 1.3 G.O. 770/ (M)/13 TC dated G.O. No. 402/ (M)/13 dated G.O. no. 510/ Para PICUP will get the assignments done by valuers/ca firms based on actual fee charged which will be reimbursable to PICUP by applicant company and will be in addition to the 1% administrative charges payable to PICUP 37. Detailed particulars of production, sale, stoppages in production, if any, closure of unit, etc. with clear reasons for same to be certified and furnished to Nodal Agency 38. Certified Particulars of increase in fixed capital investment, if any, sale/loss of fixed assets, if any, and change in constitution of the unit to be furnished to Nodal Agency 39. Audited Statements of Accounts and balance sheet of eligible unit to be furnished within 9 months of close of Financial Year Para 1.3 Para 7 G.O. no. 510/ G.O. No. 2052/ (M)/13 TC dated Para 4.3 G.O. no. 510/ Para G.O. no. 510/ Para G.O. no. 510/ Para 6 Para 4.11 Para 4.11 Para

9 40. Upon achieving the prescribed limits of benefits (quantum / period), or contravention in terms and conditions, the LOC would automatically be treated as cancelled. Para G.O. no. 510/ Para Any modifications in project, changes in the Cost of Project so as to effect change in its category, application for changes in LOC conditions, etc. to be examined by Nodal Agency on its own or by an outside competent agency to be placed before the EC whose decision will be final. 42. Benefits of similar nature obtained from GOI or State Govt. will not be provided under this Scheme. Para G.O. no. 510/ Para G.O. no. 510/ Para 4.13 Para 3.9 9

Package Scheme of Incentive 2013 (PSI 2013)

Package Scheme of Incentive 2013 (PSI 2013) Incentives to Large Scale Units, Mega Projects & Ultra Mega Projects 1 1) PSI 2013 is governed by following Government Resolutions/Circulars: a) Main GR dated