5 subsidies to start industry in Gujarat

5 subsidies to start industry in Gujarat

Our Honourabe prime minister Shri Narendra Modi has given vision for Make In India, Startup India to boost manufacturing indutries in India to stand at par with developed nations. Government of Gujarat(GoG) since last decade taken numerous initiatives to boost up the Manufacturing industries. GoG give several subsidies and Incentives for such industries.  Lets have a look at 5 subsidies to start industry in Gujarat.

1. Assistance of Capital Investment Subsidy:

Who will be eligible?

  • The Enterprise registered as an industrial unit under MSME Development act, 2006 with respective DIC as manufacturing enterprise.
  • Subsidy eligible only for new and existing enterprises going for expansion or diversification. For existing enterprise investment in fixed assets should be more than 50% of total existing fixed assets and such investment should be minimum 60% only in plant and machinery.
  • For carrying out Modernization of existing unit with investment in plant –machinery and equipment by more than 25% of its existing gross fixed capital investment, such modernization should be carried out by way of adopting new technology/ production process and/or improving quality of products.
  • Only one expansion/diversification and one modernization during operative period is eligible to new unit set up during operative period of the scheme. Similarly one expansion/ Diversification and one Modernization during operative period shall be eligible to existing enterprises as on 1st January 2015. THAT MEANS THAT ENTERPRISE CAN CLAIM SUBSIDIES ONLY ONCE IN INDUSTRIAL POLICY, 2015.
  • Old & second hand machinery will not be eligible for assistance.

Quantum of Subsidy:

  • Capital Investment subsidy will be eligible only on Loan Amount disbursed by the Bank/Institution.
  • In Municipal Corporation Areas: Subsidy @ 10% of term loan amount disbursed by the bank/ Financial Institution with maximum amount of Rs.15 lakhs
  • Area Outside Municipal Corporation limit: Subsidy @ 15% of term loan amount disbursed by the bank/ Financial Institution maximum amount of Rs.25 lakhs.

2. Interest Subsidy to MSMEs for manufacturing Industries

Who will be eligible?

Eligibility criteria will be same as of Capital Subsidy.

Quantum of Subsidy:

  • Enterprise which has obtained first disbursement during the operative period of the scheme will eligible for the assistance.
  • Interest Subsidy will be reimbursed after payment to the Bank/Institution
    Area Rate of Interest subsidy Maximum limit No. of Years
    Municipal Corporations limit5% on Outstanding term loanRs. 25 lakhs per annum 5 Years
    Other areas outside Municipal Corporations limit7% on Outstanding term loanRs. 30 lakhs per annum 5 Years
  • 1% additional interest subsidy, if enterprise is set up with required equity contribution for the project @ 100% by youth/s having age less than 35 years as on the date of sanction of the term loan
  • 1% additional interest subsidy, if enterprise is set up by with required equity contribution for the project @100% by SC/ST/Physically Challenged and Woman Entrepreneurs.
  • In all maximum rate of interest subsidy shall not exceed 7% in municipal corporation areas and 9% in other areas.

Other Common Conditions for Capital and Interest subsidies

  • Enterprise shall have option for date of availment of interest subsidy either from the date of first disbursement of the loan or from the date of commencement of commercial production. This opted date will be final and period of 5 year will start from that date.
  • The interest subsidy will be reimbursed to the enterprise who pays regular installments and interest there of to the financial institution. If the enterprise becomes defaulter for any period, it will not be eligible for reimbursement of interest subsidy for that default period.
  • In case term loan is sanctioned after one year from the date of commencement of commercial production, such enterprise will not eligible for Interest subsidy under the scheme.
  • Total quantum of Interest Subsidy (State + Central) in any case shall not exceed the total loan amount disbursed by the bank/Financial Institutes

3. Reimbursement of CGTMSE fees for MSEs:

Who will be eligible?

  • The Micro & Small Enterprise registered as an industrial unit under MSME Development act, 2006 with respective DIC as manufacturing enterprise.
  • Women Entrepreneurs, SC, ST and Physically challenged entrepreneurs those who are availing collateral free term loan upto Rs. 1 Crores from financial institutions / Bank under CGTMSE will be eligible.

Assistance available

  • Assistance as reimbursement @100% annual service fees paid to Bank / Financial institution for collateral free term loan under CGTMSE, for the period of five year.

4. Assistance for Quality Certification

Who will be eligible?

The Enterprises engaged in manufacturing activity and registered as an industrial unit under MSME Development act, 2006 with respective DIC. (Excluding Renewal Charges of certification).

Assistance available
  • The enterprises would be eligible for assistance under the each scheme mentioned as under collectively or individually.

1. ERP System:-

  • 50% of capital cost for installing ERP system of approved ERP services provided by Industries Commissionerate subject to a maximum amount of Rs. 50,000/-.

2. ISO Certification:-

  • 50% assistance for Consulting fees charges of obtaining ISO certification maximum amount of Rs.50,000/- .

3. National and International certification:-

    • 50% of all charges up to a maximum amount of Rs.5 lakhs paid for the WHO GMP, Hallmark Certification and others national and international certification.
    • 50% of cost of testing equipments and machinery required and purchased before of quality certification totalling up to maximum amount of Rs.10 lakhs enchased up to the date of certification or operative period whichever is earlier.
  • 50% of fees payable to recognized international certification authority
  • This scheme is supplementary to such scheme of GoI. However, in no case total assistance from GoG and GoI should exceed more than actual expenditure incurred by MSME for said purpose

5. Scheme for Market Development Assistance

Who will be eligible?

  • Any Manufacturing Micro, Small & Medium Enterprise possessing MSME Part-II acknowledgement

Quantum of assistance:

  1. Assistance for Participation in International Trade Fair outside India
  • Assistance @50% for rent of stall or space cost of product literature and display material subject to maximum Rs. 4 lakhs. However, assistance for product literature and display material cost shall not exceed Rs.50,000/- per participation.
  • Enterprise will be entitled for maximum three times during operative period of the scheme.
  • The assistance would be in the form of reimbursement
  • Assistance will only be available for participation in exhibition approved by the Committee.

Source:http://ic.gujarat.gov.in

Author: smit shah

I am a passionate Chartered Accountant having deep interest in taxation with combination of blogging.

Leave a Reply