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INCENTIVES & CONCESSIONS to the Industrial Units in Himachal
Pradesh
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| The Incentives & Concessions to the industrial units subject to their eligibility are as under :- |
| 1.1 Sales Tax Concessions |
| 1.1.1 Village Industries/Tiny units |
| New village industries with fixed capital investment upto Rs. 10 lakhs and financed wholly by HPKVIB/KVIC shall be exempted from payment of sales tax for a period of 8 years in industrially backward areas and in priority sector, and for a period of 5 years for units in industrially developing areas. In respect of other new village industries and tiny units, sales tax shall be leviable at a concessional rate of 25% of the applicable rate on the sale of products upto Rs. 60 lacs per annum for a period of 8 years in industrially backward areas and in priority sector; and upto sales turnover of Rs. 45 lacs per annum for a period of five years in industrially developing areas. This concession will not be admissible to the produce of breweries / distilleries, non fruit / vegitable based wineries and botteling plants (both for Country Liquor and Indian Made Foreign Liquor). |
| 1.1.2 Units in SSI/Medium and Large Sector |
| In case of units in SSI/medium and large sectors,deferment of General Sales Tax for a period of 8 years on the goods other than produce of breweries, distilleries, non-fruit/vegetable based wineries and bottling plants (both for Country Liquor and Indian Made Foreign Liquor) manufactured by the new industrial units set up in the industrially backward areas and in priority sector; and for a period of 5 years for units in industrially developing areas subject to furnishing of security/bank guarantee to the satisfaction of the Excise & Taxation Department of Government of Himachal Pradesh. The tax deferment during Ist 8 years or 5 years as the case may be shall become due for payment after a period of 5 years from its collection. This means that the tax collected in the Ist year shall be payable in the 6th year, second year in the 7th year and so on. |
| 1.1.3 The eligible existing units shall have an option either to opt for the General Sales Tax Concessions as provided in paras 7.1.1 and 7.1.2 above for the unexpired period and subject to their continuing eligibility under the previously applicable rules or to continue to avail these concessions as per those rules. Such an option shall have to be exercised by the 31st July, 1999 failing which they shall be covered by the previously applicable rules. |
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1.1.4 The GST on the raw material, processing and packaging material except timber, shale and limestone used by the existing and new industrial unit(s) for captive manufacturing within the State shall be leviable at a concessional rate of 1% upto 31-03-2009. |
| 1.1.5 Central Sales tax at a concessional rate of 1% shall be leviable on the goods manufactured by new and existing industrial units except produce of breweries, distilleries, non fruit/vegetable wineries and bottling plant (both for Country Liquor and Indian Made Foriegn Liquor) upto 31-03-2009. |
| 1.1.6 Period of these concessions in case of new industial unit(s) shall commence from the date of commencement of commercial production or from the date of notification issued by the Department of Excise & Taxation in this regard, whichever is later. In case of existing unit(s), these concessions would be available from the appointed day or the date of notification, whichever is later. |
| 1.2 Power concessions |
| 1.2.1 New industrial unit(s) in priority sector shall be exempted from payment of electricity duty for a period of 8 years in the industrially backward areas and for 5 years in industrially developing areas.Period of this concession will commence from the date of commencement of commerical production or from the date of notification of Department of MPP and Power, whichever is later.The existing unit(s) availing this incentive shall continue to avail the same under the previous rules for the unexpired period of its/their eligibility. |
| 1.2.2 The existing eligible units availing power tariff freeze subject to their continuing eligibility under the previously applicable rules shall continue to avail the concession as per those rules. |
| 1.2.3 No electricity duty will be charged from any industrial unit, new or existing, on the power generated from its captive power generation set(s)/hydel plant(s). |
| 1.2.4 The industrial units employing atleast 50 workers may be permitted on case to case basis to build residential complexes for industrial workers within the campus. The rate of power tariff to such residential complexes both new and existing shall be as applicable to domestic consumers. |
| 1.3 Interest Subsidy to Tiny & Small Scale Units in Priority Sector located in Industrially Backward areas |
| 1.3.1 Subsidy in the rate of interest on term loan taken by tiny and SSI units from financial institution(s) shall be given @ 4% subject to a ceiling of Rs.2.00 lac per unit per year for priority sector units set up in industrially backward areas for a period of 6 years provided that the unit pays a minimum of 8% interest after availing interest subsidy. In case rate of interest after subsidy falls below 8%, the rate of subsidy shall be reduced accordingly. This concession shall also be admissible on term loan taken from financial institution for expansion/ deversification. The subsidy shall be disbursed through the concerned financial institution. This subsidy shall not be admissible on defaulted/rescheduled installment(s) and the period of default shall be counted for determining the period of eligibility. |
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1.3.2 The existing unit(s), availing this incentive irrespective of their status, shall have an option either to opt for this concession under these rules for the unexpired period and subject to their continuing eligibility under the previously applicable rules or to continue to avail this concession as per those rules. Such an option shall have to be exercised by 31st July, 1999 failing which they shall be covered by the previously applicable rules. |
| 1.4 Capital Investment Subsidy |
| Tiny units in priority sector and coming into commercial production after the appointed date in industrially backward areas shall be given a capital investment subsidy @ 10% of fixed capital investment subject to a ceiling of Rs.2.5 lacs per unit. This subsidy will be admissible on the creation of new assets only. The sanction/ disbursement shall be governed by the erstwhile C.I.S. Manual. |
| 1.5 Price Preference |
| The products of tiny/SSI units manufactured in H.P. may be given a price preference of upto 15% in the process of finalisation of rate contract(s) in respect of purchases affected by the Government Departments, Semi-Government Organisations, Corporations and Boards. For large and medium industries, the price preference may be upto 3%. |
| 1.6 Subsidy on the cost of preparation of feasibility report |
| New industrial unit(s) in tiny and small scale sector will be eligible for subsidy on the cost of preparation of feasibility report @ 50% of its cost subject to a ceiling of Rs.10,000/- in case of tiny unit(s) and Rs.20,000/- for SSI unit(s). |
| 1.7 Facility for quality, productivity, technical upgradation & Pollution control devices |
| Government may provide common effluent treatment plant(s)/pollution control devices and common testing facilities in Industrial Areas/Estates/Growth Centres or in a cluster of industries as a part of infrastructure. |
| 2. SPECIAL PACKAGE OF INCENTIVE TO FRUIT, VEGETABLE AND MAIZE BASED UNITS, CONSUMING ATLEAST 60% OF THEIR TOTAL CONSUMPTION FROM LOCAL PRODUCE PER ANNUM AND LOCATED IN INDUSTRIALLY BACKWARD AREAS (EXCEPT PRODUCE OF BREWERIES, DISTILLERIES, NON FRUIT/VEGETABLE WINERIES AND BOTTLING PLANT BOTH FOR COUNTRY LIQUOR AND INDIAN MADE FOREIGN LIQUOR) |
| Notwithstanding anything contained in the preceeding paras, the fruit, vegetable and maize based units, consuming at least 60% of their total consumption from local produce per annum and located in industrially backward areas (except produce of breweries, distilleries, non fruit/vegetable wineries and bottling plant both for Country Liquor and India Made Foreign Liquor), shall be eligible for the following incentives :- |
| 2.1 Land/shed shall be allotted on out of turn basis at a nominal price /rent to be determined by the Government from time to time. While considering allotment, such unit(s) shall get precedence even over units in priority sector. |
| 2.2 GST exemption for a period of 10 years will be admissible to new industrial units. |
| 2.3 The GST on the raw material, processing and packaging material except timber, shale and limestone used by the existing and new industrial unit(s) for captive manufacturing within the State shall be leviable at concessional rate of 1% upto 31-03-2009. |
| 2.4 Central Sales Tax at concessional rate of 1% shall be leviable on the goods manufactured by new & existing industrial units upto 31-03-2009. |
| 8.5 Such new industrial unit(s) shall be exempted from the payment of electricity duty for a period of 10 years. No electricity duty shall be charged on the power generated from D.G.set/hydel plant. |
| 2.6 Such new industrial unit(s) shall be exempted from the payment of State excise duty for a period of 7 years. |
| 2.7 Period of these concessions as provided in Rule 8.2 to 8.6 above will be available to new industrial unit(s) from the date of commencement of commercial production or from the date of notification issued in this regard, whichever is later. In case of existing unit(s), these concessions, as eligible, would be available from the appointed day or the date of notification, whichever is later. |
| 2.8 Such new industrial unit(s) shall be eligible for a subsidy of 10% in the rate of interest on term loan for a period of 6 years subject to a ceiling of Rs.10.00 lacs p.a., provided that the unit pays a minimum of 6% interest after availing the interest subsidy. In case the rate of interest after a subsidy of 10% falls below 6%, the rate of subsidy shall be reduced accordingly. This subsidy shall not be admissible on defaulted/rescheduled installment(s) and the period of default shall be counted for determining the period of eligibility. |
| 2.9 Such new industrial unit(s) will be entitled to an investment subsidy @ 25% on cost of plant and machinery installed subject to a ceiling of Rs. 25.00 lacs. The sanction/disbursement shall be governed by erstwhile C.I.S. Manual. |
| 2.10 The incentives of price preference and subsidy on the cost of preparation of feasibility report as provided under rule 7.5 and 7.6 shall also be available to such unit(s). |
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2.11 The existing units under this category, unless specifically provided otherwise, shall continue to be governed by the previously applicable rules. |
| 3. INCENTIVES AVAILABLE TO UNITS IN TAX FREE ZONE |
| Any new industrial unit(s) except breweries, distilleries, non-fruit/vegetable based wineries and bottling plants (both for Country Liquor and Indian Made Foreign Liquor) in the tribal areas of the State, as notified from time to time, shall be exempted from payment of any State taxes and duties (excluding levies in the shape of cess, fees, royalties etc.) for a period of 10 years from the date of commencement of commercial production or the date of notification by the concerned department(s), whichever is later. As regards other incentives, unit(s) in these areas shall be treated at par with the unit(s) in industrially backward areas. |
| Note :- The quantum & duration of package of incentives, concessions & facilities to various categories of units are given in Annexure-II to V to these Rules. |
| 4. SCHEME FOR SICK UNITS |
| 4.1 The Director of Industries, H.P. may carry out or get carried out by any suitable consultancy organisation(s) diagnostic and rehabilitation studies of the identified sick unit(s), with a view to chalking out a rehabilitation programme for such unit(s) on its/their request, provided that expenditure on such studies will be restricted up to a maximum of Rs.5000/- per unit. |
| 4.2 The Department of Industries will provide an interest rebate of 4% on any additional loan involved in the revival proposal to be administered through financial institution(s) during the nursing period as specified in the rehabilitation plan. This reimbursement will be made to the financial institution and subject to a ceiling of Rs. 1 lac spread over a period of three years on a declaration that no penal interest has been charged from the unit in question during the period for which the claims are made. |
| 4.3 The units selected for rehabilitation would be taken on parallel rate contract under the State Purchase Programme, without participation in tenders, for a period of three years, on the recommendation of the Director of Industries for item(s) that they manufacture, provided that there is a rate contract for such item(s). |
| 4.4 The margin money scheme for sick units, wherein margin money of up to Rs.50,000 is being provided to such sick unit(s) would be available to tiny/small scale unit(s). |
| 5. PROJECT SPECIFIC SPECIAL PACKAGE |
| 5.1 Notwithstanding anything contained hereinbefore, the Government may grant project specific special package to any new medium and large industrial unit proposed to be set up in the State which has potential for substantial employment gneration, both direct and indirect, ancillarisation etc. on case to case basis, in the public interest. |
| 6. POWER TO AMEND AND/OR RELAX/REPEAL ANY OR ALL PROVISIONS OF THE RULES |
| 6.1 Notwithstanding anything contained in any of the provisions of these Rules, the State Government may at any time. |
| i) make any amendment to these Rules, or repeal them; |
| ii) make any relaxation in applying the provisions of these Rules on merits of each case, as the State Government may consider necessary and appropriate; |
| iii) impose any condition in addition to the provisions of these Rules or restrict the incentives on a case to case basis, as the State Government may consider necessary and appropriate. |
| 6.2 In case of any dispute arising out of interpretation of these Rules, the matter will be referred to the Secretary (Industries) to the Government of Himachal Pradesh, whose decision shall be final and binding on all. In any special case(s), the Government may set up a committee and refer any particular dispute to it for final decision. |
| 7. REPEAL AND SAVINGS |
| Rules Regarding Grant of Incentives, Concessions and Facilities to Industrial Units in Himachal Pradesh, 1991, 1992 and 1996 notified vide notifications No. 9-4/73-SI(Rules)-4 dated 27-3-1991,31-7-1992 and notification No. Udyog (Chh)6-96/81-IV dated 22-8-1996 and all other incentive rules notified earlier as amended from time to time and orders, direction issued thereunder shall upon the commencement of these rules, save as otherwise expressly provided in these rules, stand repealed/revised. |
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Provided that such repeal shall not affect the previous operation of the rules so repealed or anything done thereunder. |