New Scheme for Incentive to Industries (General) 2016-2021

Standard Operating Procedure (SOP) for “Scheme for Incentive to Industries”

  1. Name of the Scheme

    Scheme for financial assistance by way of Net VAT Reimbursement to MSMEs, Large, Mega & Ultra Mega Industrial Undertakings.

  2. GR No.

    Government of Gujarat, Industries & Mines Department,Resolution No:INC-102015-645918-I,dated 25/07/2016.

  3. Objective:

    To attract increased investments to the state in the manufacturing sector to create more employment opportunities, for balanced regional growth and inclusive development of the state.

  4. Operative period :

    The scheme of incentive has come into force from 25/07/2016 and will remain in force for a period of five years, i.e. 24/07/2021.

  5. Who will be eligible?

    This scheme shall be applicable to a new industrial Undertaking, or an existing Industrial undertaking that undertakes expansion, and which commences the commercial production during the operative period of the scheme (i.e. Between 25/07/2016 to 24/07/2021)

  6. Pattern of assistance :
    • The percentage of eligible fixed capital investment entitled for incentive, the percentage of net VAT for reimbursement, and the period from the date of availmentof incentive shall be as prescribed in the table below:
    Category Of Taluka% of eligible fixed capital investment entitle for incentive% of Net VAT Reimbursement to the unit% of Net VAT to be paid to GovernmentIncentive period (no. of years)
    1 100% 90% 10% 10
    2 80% 80% 20% 10
    3 70% 70% 30% 10
    • For projects of Government Department/Body/Agency,the State Level Export Promotion Committee (SLEPC) may consider full funding of the project on merits.
  7. General condition for availing Incentive :
    • An industrial undertaking eligible for reimbursement of Net VAT shall be considered as a normal dealer under the Gujarat Value Added Tax Act, 2003 and the rules made thereunder. The incentive shall be available in the form of reimbursement only.
    • The eligible industrial undertaking shall manufacture the goods on its own for which it is eligible for incentive.
    • The eligible industrial undertaking shall remain in production during the incentive period.
    • The eligible industrial undertaking shall have to make e-payment and submit e-returns.
    • Net VAT reimbursement in GST Regime:
      • Necessary modifications will be made in order to maintain the same quantum of incentives as available under the existing VAT regime, subject to conditions as may be decided by the state government, and the decision of the state government shall be final.
      • The industrial undertaking shall be reimbursed the eligible incentive up to the extent of the State GST paid on intra-state sale, subject to the tax actually realized in the government treasury, within the overall ceiling of eligible amount and period.
    • The incentives granted under the scheme shall be subject to the following conditions. Incase of any breach of one or more of these conditions, the incentives given under the scheme shall be liable to be recovered as an arrear of land revenue or in any other appropriate manner the government may deem fit.
      • An industrial undertaking that has availed incentive under the scheme shall be required to employ persons domiciled in Gujarat to the extent of at least 85% of its total number of employees. The employment of persons domiciled in Gujarat in managerial and supervisory capacity shall not be less than 60% of the number of persons employed by the enterprise in managerial and supervisory capacity, subject to the requirement of employing at least 85% of the total number of employees from persons domiciled in Gujarat. The industrial undertaking shall be required to submit a list of persons employed and such other information required for verification of having satisfied this condition, before the sanction of incentives under the scheme.
      • An industrial undertaking that has availed similar incentive as provided under this scheme under any other scheme of the state government shall not be eligible for the incentive under this scheme.However, the industrial undertaking may avail similar incentives under a scheme of the central government.
      • Any investment made by an existing industrial undertaking for renovation, modernization, rehabilitation, or rationalization will not be eligible for incentive under this resolution.
      • An industrial undertaking that has availed incentive under this scheme shall install and effectively operate and maintain pollution control measures as per the standards prescribed and approved by the competent authority in this regard.
      • An industrial undertaking that has availed incentive under this scheme shall be required to remain in production continuously till the expiry of the eligible period of incentive. However, if production is discontinued due to reasons beyond the control of the management, the sanctioning authority may condone the period for which production is discontinued after due verification of details and reasons for discontinuation of production and after satisfying itself to the same.
      • The industrial undertaking shall furnish to the Industries Commissioner/General Manager, District Industries Centre information regarding production and employment for each financial year within 60 days of the close of the financial year. It shall also furnish information on such other matters that the state government may require from time to time.
  8. Standard Operating Procedure :
    1. Registration

      An industrial undertaking eligible for incentive under this scheme shall apply for provisional registration to the concerned District IndustriesCentre in case of micro, small and medium project, and to the Industries Commissioner in case of large, mega and ultra mega project, in the prescribed format, during the operative period of the scheme.

      Application Form No.1

      Checklist - For New Unit

      Checklist - For Expansion Unit

    2. Provisional Eligibility Certificate for 20% net VAT reimbursement

      The industrial undertaking having registration shall submit an application for the provisional eligibility certificate after commencement of commercial production.

      Application Form No.2

      Checklist

      Annexures Format

      1. The industrial undertaking shall have to submit a certificate from a Chartered Accountant in respect of the investment made in the project up to the date of commencement of commercial production to General Manager, District lndustries Centre for MSMEs and Industries Commissioner for large, mega and ultra mega project.

      2. In case of MSME, the General Manager of District Industries Centre, and in case of other industrial projects the Industries Commissioner, shall issue within thirty days of the date of receipt of application a Provisional Eligibility Certificate for the purpose of reimbursement of net VAT incentive for an amount of 20% of the gross fixed capital investment as on the date of commencement of commercial production as submitted by the industrial undertaking.

      3. The industrial undertaking shall be entitled to claim Net VAT reimbursement incentive under this resolution based on the Provisional Eligibility Certificate

    3. Final Eligibility certificate
      • On completion of the project, the industrial undertaking will submit all the information details as required by the authorized officer.

      • The industrial undertaking shall have to submit a certificate from a Chartered Accountant in respect of investment, particulars of local employment, and the applicable certificate from GPCB to General Manager, District Industries Centre for MSMEs and Industries Commissioner for large, mega and ultra mega project.

      • The lndustries Commissioner/General Manager shall constitute an Asset Verification team to verify the investment details. The Assets Verification report of the team shall be placed before the sanctioning authority.

      • The final eligibility of incentive shall be approved by the sanctioning authority. Thereafter, the final Eligibility Certificate for availing Net VAT incentive shall be issued by the Industries Commissioner/General Manager.

  9. Release of net VAT reimbursement Incentives :

    Net VAT incentive to be reimbursed to the industrial undertaking in one financial year will not exceed one-tenth of the total amount of eligible incentive, subject to a maximum amount in a financial year as below:

    Classification of ProjectAmount (Rs. in Crore)
    Ultra Mega Industrial Unit 500
    Mega industrial Unit 400
    Large Industrial Unit 150
    Micro, Small or Medium Industrial Unit 50
  10. Frequently asked Questions(FAQ)under the “Scheme for Incentive to Industries (General) 2016-21”
  11. Please contact following officer for further information, if required.

    Shri D. R. Parmar,
    Deputy Commissioner of Industries (Large)
    Phone: 079-232-52584
    E-mail : icdciinc@gujarat.gov.in

Office of The Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar 382 010. Gujarat. INDIA
Ph. : 23252683/23252617 • Email ID : iccord@gujarat.gov.in

Copyright@2016, The Industries Commissionerate. All Rights Reserved.
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