PACKAGE SCHEME OF INCENTIVE (SUBSIDY)

SHUBHAM MALANI
In order to encourage the dispersal of industries to lesser developed areas of the State,
the Government has been giving package of incentives to New Industrial Units
/expansion Units through “Package Scheme of Incentives“
Period- Scheme shall be operative from 1 April 2013 to 31st March 2018
COVERAGE UNDER THE PSI - 2013
 Industries listed in the First Schedule of the Industries Act ,1951
 Manufacturing Enterprises as defined in the MSMED Act, 2006
 Information Technology Manufacturing Units registered with the DIC or (MIDC)
 Bio-technology Manufacturing Units.
 Cold Storages
 Mechanized Food/Agro Processing Industries in the following sectors:
A. Dairy, Fruit and Vegetable Processing.
B. Grain & Fish Processing.
C. Consumer foods including Packed foods.
D. Non alcoholic beverages from fruits and vegetables.
CLASSIFICATION OF AREAS FOR PSI-2013
For the purposes of the PSI- 2013, detailed taluka-wise classification of different areas of
the State :
Sr.No. Group Area Denotes
1. Group A Denotes Industrially developed areas
2. Group B Denotes Area less developed than the areas under Group A.
3. Group C Denotes Areas, which are less developed than those covered
under Group B.
4. Group D Denotes the lesser-developed areas of the State, not
covered under Group A/B/C.
5. Group D+ Denotes the least developed areas, not covered under
Group A/ B/C/D.
 6. No Industry Denotes District having no industries and not covered
District under Group A / B/ C/ D & D+.
7. Naxalism Area Denotes Area affected by naxalism.

CLASSIFICATION OF INDUSTRIES
Industries have been classified on the basis of investment made i.e. more the capital
investment in setting up business unit, more incentives are available as per the Group to
which it belongs.
 Micro, Small & Medium Manufacturing Enterprise (MSME):- Unit having
investment in plant and machinery does not exceed Rupees Ten Crores.
 Large Scale Industries: - Units having investment more than MSME but less than
Mega Projects defined below.
 Mega/Ultra Mega project:- Unit satisfying the minimum threshold limit of fixed
Capital Investment or Direct Employment prescribed in table given below :-

Type of Unit Areas Maximum Fixed Minimum Direct

Capital Investment Employment
(Rs. In Crore) (Persons)
A&B 750 1500
C 500 1000
Mega Project D & D+ 250 500
No Industry District & Naxalism 100 250
Affected
Ultra Mega Entire State 1500 3000
Project

FINANCIAL INCENTIVES FOR MSMEs/LSIs UNDER PSI-2013

New MSME/LSI Units will eligible for a basket of incentives mentioned as under: -
Taluka/Area Ceiling as % of Fixed No. of Years
Capital Investment
MSME MSME LSI MSME MSME LSI
Food & Agro Food & Agro
Processing Processing
A --- --- --- 7 8 7
B 20 30 --- 7 8 7
C 40 50 30 7 8 7
 D 70 80 40 10 11 7
D+ 80 90 50 10 11 7
No Industry District 90 100 70 10 11 7

EXPANSION/DIVERSIFICATION PROJECT
An Expansion unit cover under group B, C, D, D+, Naxalism or No-Industry District are
eligible for incentive under PSI-2013 if additional fixed capital investment exceeds 25%
of existing Gross Fixed Capital Investment subject to Minimum of `25 Lacs in case of
MSME and `5 Crore in case of Non-MSME.
Taluka /Area Ceiling as % of Fixed No. of Years
Capital Investment
MSME MSME LSI MSME MSME LSI
Food & Agro Food & Agro
Processing units Processing
A --- --- --- 6 7 6
B 15 22.5 --- 6 7 6
C 30 37.5 22.5 6 7 6
D 52.5 60 30 9 10 6
D+ 60 67.5 37.5 9 10 6
No Industry District 67.50 75 52.5 9 10 6
Naxalism Affected 75 82.5 60 9 10 6
Area
FINANCIAL INCENTIVE COVERED UNDER BASKET OF INCENTIVE
The Basket of various financial incentive available under PSI-2013 include following
three types of products:
1. Industrial Promotion Subsidy (IPS) :
For MSMEs (New/Expansion)-
Taluka /Area The quantum of Industrial promotion Subsidy very year
classification
Naxalism Affected VAT on Sales less VAT paid on Purchase +CST payable+ 100% of ITC
No Industries VAT on Sales less VAT paid on Purchase +CST payable+ 75% of ITC
 Taluka /Area The quantum of Industrial promotion Subsidy very year
classification
Entire Vidarbha and VAT on Sales less VAT paid on Purchase +CST payable+ 65% of ITC
Marathwada (Other
than Sr. No.1 & 2.)
Group D+ Taluka (other VAT on Sales less VAT paid on Purchase +CST payable+ 50% of ITC
than Sr. No. 1 &3)
Group D Taluka (other VAT on Sales less VAT paid on Purchase +CST payable+ 40% of ITC
than Sr. No. 1 &3)
Group C Taluka VAT on Sales less VAT paid on Purchase +CST payable+ 30% of ITC
Group B Taluka VAT on Sales less VAT paid on Purchase +CST payable+ 20% of ITC

Taluka /Area Classification The Industrial Promotion Subsidy Every Year

Naxalism Affected Area 100% VAT on sales less VAT paid on Purchases + CST payable

No Industries Districts, 90% VAT on sales less VAT paid on Purchases + CST payable
Vidarbha and Marathwada
Group D+ Taluka (Other 80% VAT on sales less VAT paid on Purchases + CST payable
than Sr. No. 1 and 2)
Group D Taluka (Other than 70% VAT on sales less VAT paid on Purchases + CST payable
Sr. No. 1 & 2)
Group C Taluka 60% VAT on sales less VAT paid on Purchases + CST payable

For Large Scale Industries (New/Expansion) –

2. Interest subsidy :
All new eligible MSME units in area other than group “A” will be eligible for interest
subsidy in addition to IPS .The amount of interest subsidy will be effective rate of interest
after deducting interest subsidy receivable from any institution / under any Govt. of India
scheme or 5 % p.a. whichever is less. However the amount of Interest subsidy should not be
in excess of electricity bills paid during the year.

3. Power Tariff Subsidy :

Eligible New MSME other than group “A” will be eligible for power tariff subsidy. The
subsidy will be to the tune of `1/- per unit for the Units located in Vidarbha, Marathwada,
North Maharashtra and the Districts of Raigad, Ratnagiri and Sindhudurg in Konkan
Region and ` 0.50 per unit for the Units in other areas of the State for a period of 3 years
from the date of commencement of commercial production, for the energy consumed and
paid.

ADDITIONAL INCENTIVES OTHER THAN BASKET OF INCENTIVE

In Addition to Basket of Incentive some additional Incentives are also offered in
addition to above Basket of Incentive:

1. Exemption from Electricity Duty :

All new eligible units in area other than group “A” & “B” will be exempted from
payment of Electricity Duty for a period of 15 years. Necessary Notification under the
provision of the Electricity Duty Act 1958 will be issued separately by Energy
department.

2. Waiver of Stamp Duty :

All New and units undertaking Expansion/ Diversification will be exempted from
payment of Stamp duty up to 31st March 2011 in “C, D, D+ Talukas and No Industry
Districts. However, in A and B areas, stamp duty exemption would be available as given
below:-
 BT and IT units in public Parks : 100%
 BT and IT units in private Parks : 75%
 Mega Projects : 50%

1. Incentives for Strengthening MSMEs and LSIs :

i) New MSMEs and Expansion thereof in all categories of areas will be
eligible for following incentives –
Type of Expenses Subsidy
Technology 5% subsidy on capital equipment for Technology Up—Gradation,
Up —gradation subject to a maximum of ` 25 Lacs
Quality 75 % subsidy on the expenses incurred on quality certification
certification limited to ` 1 Lacs
Cleaner 25% subsidy on capital equipment for cleaner production
production measures, limited to ` 5 Lacs
Patent registration 75 % subsidy on the expenses incurred on patent registration
limited to ` 10 Lacs for the National patents and ` 20 Lacs for the
International patents.
Credit Rating of 75% of the cost of carrying out Credit Rating by Small Industries
MSMEs Development Bank of India/ Government accredited Credit
Rating Agency, limited to ` 40,000.

ii) New MSMEs and Expansion thereof in all categories of areas will be
eligible for following incentives
 Water audit 75% of cost of water audit limited to ` 1.00 Lacs.
Energy audit 75% of cost of energy audit limited to ` 2.00 Lacs.
Capital Equipment 50% of the cost of Capital Equipment under the
measures to conserve/recycle water, limited to ` 5 Lacs.
Improving energy 50% of the cost of Capital Equipment for improving
Efficiency energy Efficiency, limited to ` 5 Lacs.

iii) Conditions for availing above all Incentives for Units coming up in
Naxalism affected Talukas
Conditions for Conditions
availing Incentives New/Expansion Units, setting up manufacturing industrial
for Naxalism affected facilities in Naxalism affected Talukas.
Talukas Employing at least 75 % local persons from the Naxalism
affected areas will be eligible for incentives.

iv) Incentives For Mega Projects/ Ultra Mega Projects

Norma Incentive High Power Committee under the chairmanship of the Chief
Scheme Secretary, Government of Maharashtra on a case to case basis.
Customized package 1) The Cabinet Sub Committee for Industry, under the
of incentives and chairmanship of the Chief Minister of Maharashtra will have the
special offer or extra powers to sanction customized package of incentives.
2) Even offer special / extra incentives for prestigious Mega
incentives
Projects / Ultra Mega Projects, on a case to case basis.

DOCUMENTS FOR APPLICATION UNDER PSI-2013

After Disbursement of Loan or Bank Loan Sanction Letter is given by Bank, unit can apply
under PSI-2013 Scheme.
List of documents required are as follows:
Effective 1 Land Documents :
steps MIDC Land : Plot possession letter/transfer letter and registered
agreement to Lease/transfer of lease rights.
Private Land : (a) Sale Deed, (b) latest 7/12 extract and (c ) NA
permission for industrial use
 2 Constitution documents :
a) Partnership Deed.
b) Certificate of incorporation.
c) Registration certificate.
3 Project Report/Profile.
4 Authorization for signing of application, execution of agreements etc.
Investment 1 Power sanction letter
And 2 Power bill copy (one month)
production 3 First 3 Sale bill copy
4 First 3 Purchase bill copy
5 EM II and ELP
6 CA certificate certifying investment in Fixed Assets
7 Chartered engineer’s certificate for self fabricated machinery.
8 Architect’s certificate for cost of construction
9 Bank Loan sanction letter.
10 Bank appraisal Report to be submitted
Consents & 1 MPCB consent to establishment
permission 2 MPCB consent to operate/ acknowledgement of having filed
application with MPCB together with proof of payment.
3 Self-certification in format on Stamp paper.
4 Building plan approval from Competent Authority

Mistakes are always forgivable, if one has the courage to

admit them.
- Bruce
Lee