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 SGST / Net VAT Reimbursement to MSMEs, Large, Mega & Ultra Mega Industrial Undertakings.

  2. Government Resolutions

    Government of Gujarat, Industries & Mines Department,

  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. 25/07/2016 to 24/07/2021)

  6. Who will be ineligible?
    • Ineligible Industries

      Ineligible industries mean the industries listed in Annexure 'B' to this resolution. Ineligible industries shall not be eligible for incentive under this scheme.

      Note 1 -An industrial undertaking that has availed any incentive for the same assets under any scheme of the state government, or any agency of the state government, shall not be eligible for incentive under this scheme.

      Note 2 - An industrial undertaking that shifts to a new location by closing down, completely or partially, the original unit in the previous location will not be eligible for incentive under this scheme.

  7. Procedure for Submission of Application
    • The eligible Industrial Undertaking shall apply only online in prescribed format on http://ifp.gujarat.gov.in (Investor Facilitation Portal), during the operative period of the scheme along with requisite documents. (Requisite documents are required to be uploaded)
    • In case of Micro, Small and Medium project the industrial undertaking has to apply to the concerned District Industries Centre (DIC) office at District level.   
    • In case of Large, Mega and Ultra-Mega project the Industrial Undertaking has to apply to the office of Industries Commissioner
  8. Pattern of assistance :
      1. An eligible industrial undertaking will be eligible for incentive according to the classification of the project (Ultra Mega, mega, Large, MSME), the Category of Taluka Annexure 'A', and the eligible fixed capital investment.
      2. The percentage of eligible fixed capital investment entitled for incentive, the percentage of Net SGST / Net VAT for reimbursement, and the period from the date of availment of incentive shall be as prescribed in the table below:
    Table: Quantum of Assistance
    Category Of Taluka% of eligible fixed capital investment entitle for incentive% of Net SGST / Net VAT Reimbursement to the unit% of Net SGST / 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 the purpose of claiming net SGST reimbursement, the statement shall provide details of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed separately for eligible unit and non-eligible units which shall be reconciled with such details furnished in the returns filed under the Gujarat Goods and Services Act, 2017.
      • The statement shall contain the details of the utilization of input tax credit between eligible unit and non-eligible units as per provisions of the Act and rules made thereunder.
      • In cases where usage of inputs, input services and capital goods pertaining to eligible unit are not identifiable, credit pertaining to such inputs, input services and capital goods shall be assigned on provisional basis, to eligible unit and non-eligible units in the proportion to turnover of outward supplies of respective units during the quarter. Final calculation with regard to distribution of credit of inputs, input services and capital goods between eligible unit and non-eligible units shall be made at the end of financial year in the proportion to turnover of outward supplies of respective units during the year.
      • The reimbursement of net SGST shall be granted quarterly on provisional basis by the office of the Industries Commissioner. The amount of net SGST reimbursement admissible for the year shall be computed at the end of the year. At the end of financial year, if it is found that the excess SGST reimbursement has been granted as against the total amount of SGST reimbursement actually admissible, such excess amount of SGST reimbursement shall be paid back to the Government immediately along with interest of eighteen per cent per annum from the date of such excess reimbursement.
      • The amount of net SGST reimbursement in any case shall not exceed the amount of SGST paid in cash through adjustment of cash ledger as shown in the return furnished under the Act by such eligible unit.
  9. General condition for availing Incentive :
      1. The registration form filled at the time of application must be filled by an authorized person only. In case the person is not the promoter/investor, a letter authorizing the person on behalf of the promoter is required to be uploaded.
      2. Details entered during the online application cannot be changed throughout the application procedure. So, The Industrial Undertaking is requested to fill the form carefully.
      3. An industrial undertaking eligible for reimbursement of Net SGST / Net VAT shall be considered as a normal dealer under the respective Act and the rules made thereunder.
      4. The incentive shall be available in the form of reimbursement only.
      5. The eligible industrial undertaking shall manufacture the goods on its own for which it is eligible for incentive.
      6. The eligible industrial undertaking shall remain in production during the incentive period.
      • The incentives granted under the scheme shall be subject to the following conditions. In case 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.
  10. Procedure :

    The Government of Gujarat has developed an online platform http://ifp.gujarat.gov.in for the complete application, sanction and claim procedure. A dedicated Investor Facilitation Cell has also been set up at Industries Commissionerate for providing assistance to investors.

    Table: Process Flow of the Scheme

    process_skim_image_IC

     

    Note: Above Table shows the process flow of the scheme for Incentive to Industries. It depicts the step by step process and application procedure.

    1. Registration
      • The eligible Industrial Undertaking shall apply ONLINE in prescribed format on Investor Facilitation Portal, during the operative period of the scheme along with requisite documents. (Requisite documents are required to be uploaded)
      • In case of Micro, Small and Medium project the industrial undertaking has to apply ONLINE to the concerned District Industries Centre (DIC) office at District level.
      • In case of Large, Mega and Ultra-Mega project the Industrial Undertaking has to apply ONLINE to the office of Industries Commissioner.

                To Apply please visit on https://ifp.gujarat.gov.in

      • Time line for Application: Project proponent/applicant can apply within 180 days from the date of commercial production.
      1. For more information on registration please refer document - Guideline for application for Registration.
      2. Moreover, please refer User manual for Applicant side and Officer side as well as the flow chart on IFP portal.
    2. Provisional Eligibility Certificate for 20% Net SGST / Net VAT reimbursement

      Once the Registration is approved on the online portal, unit shall apply for Provisional Eligibility Certificate (PEC) to avail the assistance.

      The Government of Gujarat has developed an online platform http://www.ifp.gujarat.gov.in  for the complete application, sanction and claim procedure. A dedicated Investor Facilitation Cell has also been set up at Industries Commissionerate for providing assistance to investors.

      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 industries 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 SGST / Net VAT reimbursement incentive under this resolution based on the Provisional Eligibility Certificate

                 For Apply please visit on https://ifp.gujarat.gov.in

      • Time line for Application: The application for Provisional Eligibility Certificate (PEC) is to be done within 180 days from Date of Commercial Production on issuance of Registration Certificate.
      1. For more information on Provisional Eligibility certificate please refer document - Guideline for application for Provisional Eligibility Certificate.
      2. Moreover, please refer User manual for Applicant side and Officer side as well as the flow chart on IFP portal.
    3. Final Eligibility certificate

      The Industrial Undertaking can apply online for Final Eligibility Certificate under the Scheme in the below mentioned link:

      http://www.ifp.gujarat.gov.in

      • On the completion of the project, Industrial Undertaking can apply for FEC on the online portal.
      • The eligible Industrial Undertaking shall apply for Final Eligibility Certificate in prescribed format within time period after issuance of Registration Certificate/Provisional Eligibility Certificate along with requisite documents.
      • In case of Micro, Small and Medium projects, the process and the issuance of Final Eligibility Certificate will be done by District Industries Centre (DIC) office at District level.
      • In case of Large, Mega and Ultra Mega projects, the process and the issuance of Final Eligibility Certificate will be done by office of Industries Commissioner.
      • On receipt of Final Eligibility Certificate (FEC) Application with all documents, sanctioning authority will scrutinize the application. If all the documents/details submitted by the industrial undertaking are correct/ prescribed format, then the asset verification will be done.
      • Validity of the Final Eligibility Certificate (FEC) is of 10 Years from the Date of Commercial Production.
      • The forms must be filled by an authorized person only.
      • The final eligibility of incentive shall be approved by the sanctioning authority. Thereafter, the Final Eligibility Certificate for availing Net SGST / Net VAT incentive shall be issued by the Industries Commissioner/General Manager.

                 For Apply please visit on https://ifp.gujarat.gov.in

      • Time line for the Application: The application for Final Eligibility Certificate (FEC) is to be done after the time period for consideration of eligible fixed capital investment from Date of Commercial Production mentioned in G.R.
      1. For more information on Final Eligibility Certificate please refer document - Guideline for application for Final Eligibility Certificate.
      2. Moreover, please refer User manual for Applicant side and Officer side as well as the flow chart on IFP portal.
    4. Disbursement (claim process) of Net SGST as reimbursement Incentive:

      “Industrial Undertaking can apply for the disbursement (claim), after getting the provisional eligibility certificate or after applying for final eligibility certificate”.

      • Net SGST / Net VAT incentive to be reimbursed to the industrial undertaking in one financial year will not exceed incentive, subject to a maximum amount in a financial year as below: one-tenth (1/10th) of the total amount of eligible.
      • The eligible unit shall not carry out any trading activity or provision of any services not relating to eligible products from its place of business. The requirement for obtaining separate segregated books of accounts for different economic activities such as manufacturing, trading and service being carried out from same / single business premises.
      • The eligible unit shall have to obtain a separate registration, if the unit carries out trading activity or provision of any services not relating to eligible products.
      • Incentives shall be allowed only for eligible goods manufactured in the eligible unit and not on the resale of goods.
      • If the eligible unit has shown its inter-State sales as intra-State sales through intermediary I marketing network I or any other middle man, either directly or indirectly controlled by it, in order to get higher incentives then the eligibility certificate of the eligible unit shall be liable to be cancelled with effect from the date of such contravention, and the eligible unit shall be liable to return forthwith the incentives availed together with interest at the rate of eighteen per cent per annum.
      • If the industrial undertaking availing incentive under the Scheme for Incentives to Industries under Resolution No.INCI1020151645918/I dated 25-7-2016 (as mentioned at serial no.2 above) or under the scheme for assistance for Plastic Industry (Revised) under Resolution No.MISI1020141924790/I dated 06-01-2017 (as mentioned at serial no.3 above), is already manufacturing the same product in one or more existing industrial units in Gujarat owned by it or by its subsidiary, then the turnover of all such existing industrial units of the same product for five consecutive years commencing from the year in which the industrial undertaking avails incentive under this resolution shall not- be lower than the average turnover of the same product in the immediately preceding three financial years from the year in which the industrial undertaking avails incentive under the resolution.
      • If the turnover in any of the five consecutive years, is lower than the average turnover of the immediately preceding three years from the year in which the industrial undertaking avails incentive under this resolution, then the net SGST incentive shall be reduced to the extent of net SGST applicable on the difference of average turnover of preceding three financial years and the actual turnover of the same product.
      • The eligible unit shall submit to Industries Commissioner the details of amount of reimbursement claimed in the prescribed Performa duly certified by a Chartered Accountant. The Performa includes a declaration by the eligible unit stating that it has not shown its inter-state sales as intra-state sales through intermediary either directly or indirectly controlled by it in order to get higher incentives.
      • For the purpose of claiming net SGST reimbursement, the statement shall provide details of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed separately for eligible unit and non-eligible units which shall be reconciled with such details furnished in the returns filed under the Gujarat Goods and Services Act, 2017.
      • The statement shall contain the details of the utilization of input tax credit between eligible unit and non-eligible units as per provisions of the Act and rules made thereunder.
      • In cases where usage of inputs, input services and capital goods pertaining to eligible unit are not identifiable, credit pertaining to such inputs, input services and capital goods shall be assigned on provisional basis, to eligible unit and non-eligible units in the proportion to turnover of outward supplies of respective units during the quarter. Final calculation with regard to distribution of credit of inputs, input services and capital goods between eligible unit and non-eligible units shall be made at the end of financial year in the proportion to turnover of outward supplies of respective units during the year.
      • The reimbursement of net SGST shall be granted quarterly on provisional basis by the office of the Industries Commissioner. The amount of net SGST reimbursement admissible for the year shall be computed at the end of the year. At the end of financial year, if it is found that the excess SGST reimbursement has been granted as against the total amount of SGST reimbursement actually admissible, such excess amount of SGST reimbursement shall be paid back to the Government immediately along with interest of eighteen per cent per annum from the date of such excess reimbursement.
      • The amount of net SGST reimbursement in any case shall not exceed the amount of SGST paid in cash through adjustment of cash ledger as shown in the return furnished under the Act by such eligible unit.

                For Apply please visit on https://ifp.gujarat.gov.in

      1. For more information on Final Eligibility Certificate please refer document - Guideline for application for Disbursement (Claim) Guideline.
      2. Moreover, please refer User manual for Applicant side and Officer side as well as the flow chart on IFP portal.
  11. Frequently asked Questions (FAQ) under the “Scheme for Incentive to Industries (General) 2016-21”

    Please Visit for FAQs on https://ic.gujarat.gov.in/FAQs-incentive-to-industries.aspx

  12. Please contact following officer for further information, if required.

    Shri D. R. Parmar,
    Deputy Commissioner of Industries (Large Incentive Branch)
    Phone: 079-232-52584 (Time 10:30 A.M. to 6:00 P.M.)
    E-mail : icdciinc@gujarat.gov.in
                      icinc@gujarat.gov.in (For Office)

    For Further Information

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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