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ANNEXURE-III INDUSTRIAL POLICY HIGHLIGHTS OF THE STATE OF H.P.

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Annexure-III

                                                                                               

INDUSTRIAL POLICY HIGHLIGHTS

The State Government has consciously adopted on approach to selectively to encourage industrial development in the State so as to generate employment opportunities for local persons. The State Government has announced its strategy for industrial development in the form of its Industrial Policy statement 2004 which is currently in force, and has also been modified from time to time in line with requirement of changing times. The state Government on 7th Feb., 2009 has also again amended incentive Rules, 2004 to include Bio-technology, process based industrial  non-industrial products, processing Laboratories and R&D facilities as Thrust industries and has since also liberalized the process of transfer of industrial plots/sheds in the Industrial Area/Estates. The main highlights of the State Industrial policy are as under:

 

  1. I.                CATEGORISATION OF THE STATE

The State has been categorized into three categories 'A', 'B' & 'C' depending upon the location,  distance from the border of the State, extent of industrial development, extent of overall  backwardness, resource availability & potential for employment generation for local people. Category "A" areas are partly included in four Development Blocks of Poanta Sahib and Nahan in Sirmaur District and Dharampur and Nalagarh in Solan District excluding backward panchayats notified by the State Govt. Category "B" areas include 49 Development Blocks located in 10 non-Tribal Districts and part of the four Development Blocks included in Category A areas excluding backward panchayats located in these areas. Category "C" areas (Tax Free Zones) include 24 Development Blocks including all the seven Tribal Development Blocks in Kinnaur, Lahaul & Spiti and Chamba Districts and 17 other Development Blocks in Chamba, Kullu, Mandi, Shimla and Sirmaur Districts  and also includes all Backward Panchayats located in Development Blocks under the 'A' and ‘B’ Category areas. Graded incentives have accordingly been provided for Industry in the New Industrial Policy in terms of fiscal incentives such as Sales Tax, Electricity Duty Concessions. Under Sales Tax Incentives 1% CST is being charged from all industrial enterprises upto 31.03.2013 or till the CST is not phased out, 100 % deferment or payment of 65 % of the applicable rate of VAT has been provided in 'A' and 'B' category areas for a period of 5/8 years respectively whereas it is exempted in 'C' category areas for 10 years. Addition incentives have been provided for thrust sector industries in 'B' & 'C' category blocks in terms of allotment of land at concessional rates, exemptions from payment of electricity duty & interest subsidy. These include out of turn allotment of plots/land /sheds in industrial areas/estates, exemption from payment of State Excise Duty for a period of 7 years for units manufacturing wine/ cider out of locally produced fruits, total exemption from the payment of Electricity Duty for a period of 10 years from the date of their commencement of production and Interest subsidy @ 5 % P.A. with a ceiling of Rs. 2 lakhs P.A. for a period of 3 years for Horticulture produce, Vegetable produce, Maize based and herbal based industries. Category 'C' areas of the State have been declared as Tax Free Zones, which are exempted from the payment of any State Taxes & Duties excluding levies in the shape of cess, fees, royalties etc. for a period of 10 years.

 

  1. II.                THRUST SECTOR

The following categories of industrial units have been kept in the Priority Sector:-

i)

Units based directly on horticulture produce including hops and tea

ii)

Mineral water bottling

iii)

Automobile manufacturing units including assembly units which have a   minimum of 5    ancillary units substantially dependant on it.

iv)

Fruit/vegetable/herbs/ honey/spices based wineries

v)

Production of Ciders/ale/ liqueurs.

vi)

Sericulture /Handlooms/Khadi industry related manufacturing industrial activities

vii)

Electronic units including computer software and information technology except assembling units where value addition is less than 15%.

viii)

Floriculture

ix)

Medicinal herbs and aromatic herbs etc. processing

x)

Horticulture, Maize based industries, herbal based industries and Agro Based Industries excluding those included in the negative list

xi)

Food Processing Industry excluding those included in the negative list.

xii)

Sugar and its by-products.

xiii)

Silk and silk products

xiv)

Wool and wool products

xv)

Woven fabrics (Excisable garments)

xvi)

Sports goods and articles and equipment for general physical exercise and equipment for adventure sports/activities, tourism

xvii)

Paper & paper products excluding those in negative list (as per excise classification)

xviii)

Pharma products

xix)

Information & Communication Technology Industry, Computer hardware, Call Centres, I.T. Software and services.

xx)

Eco-tourism- Hotels, resorts in locations other than those located in the Municipal limits/NAC /Nagar Panchayats/Special Area Development Authority limits, as the case may be of Shimla, Dalhousie, Macleodganj and Manali.         

xxi)

Industrial Gases (based on atmospheric fraction).

xxii)

Spa, entertainment/amusement parks ropeways etc.

xxiii)

Handicrafts.

xxiv)

Non-timber forest product based industries.

xxv)

Precision Industries.

 

Enterprises to manufacture industrial products by any biotechnology process  and Processing    Laboratories or Research & Development activity related to processing, scale-up, other innovations and products in the field of Biotechnology, as approved by State Level Single Window Clearance and Monitoring Authority on the recommendation of the Department of Environment, Science and  Technology of the State Government.

 

  1. III.                PACKAGE OF CONCESSIONS, INCENTIVES & FACILITIES TO SMALL SMALL SCALE ENTERPRISES IN THRUST SECTOR

New Thrust Industrial Enterprises located in "B" and "C" category areas are be eligible for:

i)        Out of turn allotment of land/plot/ industrial sheds.

ii)       Allotment of land/plot/ industrial sheds @50% of the normally applicable premium as may be determined by the Government from time to time for the general category of industries.

iii)      Exemption from the payment of State Excise Duty for a period of 7 years to New Thrust Industrial Enterprises manufacturing wine/cider by using locally produced fruits.

 

New Thrust Industrial Enterprises based on Horticulture/Vegetable /Maize/ herbal produce enterprises and located in ‘B’ and ‘C’ category areas are entitled for the following additional incentives:

i)        Total exemption from the payment of Electricity Duty for a period of 10 years from the date of commencement of production.

ii)       Interest subsidy @5 % p.a. on term loan, with a ceiling of Rs. 2 lakhs p.a. for a period of 3 years.

Biotechnology related Thrust Enterprise(s) are also governed by the procedure of the Department, as applicable to other Industrial Enterprises with regard to approval/acknowledgment, processing of applications for the purchase of private land, allotment and transfer of industrial plots/land/sheds in the Industrial Areas/ Estate including Biotechnology Parks/ Estates etc. of the State, release of electricity & water connections and other infrastructural requirements. The Department of Environment, Science and Technology of the State Government is be the Nodal Department for receiving, processing and recommending the applications of such Thrust Enterprise(s) to concerned Departments/ Boards/ Corporations of the State and Central Government, as the case may be, wherever required. The Scheme of Incentives, Concessions 19 and Facilities under Incentive Rules-2004 as provided to other Industrial Enterprises are also available to Biotechnology related Thrust Enterprise(s). Such New Thrust Enterprise(s) located in ‘B’ and ‘C’ category area are eligible for the following additional incentives:-

i)        Out of turn allotment of land/plot/ industrial sheds.

ii)       Allotment of land/plot/ industrial sheds @50% of the normally applicable premium as may be determined by the Government from time to time for the general category of industries.

i)                 Interest subsidy @5 % p.a. on term loan, with a ceiling of Rs. 2 lakhs p.a. for a period of 3 years.

 

IV.

ADDITIONAL INCENTIVES TO SPECIAL CATEGORY OF ENTREPRENEURS FOR SETTING UP OF NEW INDUSTRIAL ENTERPRISE(S) IN MICRO AND SMALL SECTORS:

Special Category Entrepreneurs means entrepreneurs belonging to the Scheduled Castes, Schedule Tribes, Women, Ex-servicemen, Physically Handicapped persons (with a disability of more than 50%), BPL family category who set up new industrial unit(s) themselves. Such entrepreneurs are entitled to the following additional concessions/ facilities:-

a)   Reimbursement of 90% expenditure incurred towards the cost of preparation of feasibility report with a ceiling of Rs.25, 000/- in each case.

b)  100% subsidy on the carriage and installation cost of the plant and machinery.

c)  Special Investment Subsidy @ 10% on Fixed Capital Investment (FCI) subject to a maximum of Rs. 1,00,000/-.

d)  Interest subsidy @ 5 % on term loan availed from the Financial Institution(s) as per original repayment schedule with a ceiling of Rs. 50,000 p.a. for a period of 3 years. This interest subsidy will be made available for “Specified Category of Activities" (as listed in Annexure-IV) with FCI upto Rs. 25 lakhs. No interest subsidy will be paid on defaulted installments and the period of default will be counted for determining the ceiling of 3 years viz. interest subsidy will be  20 admissible for the first 3 years of the original repayment schedule finalized by the Financial Institution at the time of sanctioning of loan.

 

V.

SCHEME FOR REGISTRATION OF AGRO/ HORTICULTURE PRODUCE/ TOURISM AND OTHER ALLIED SECTORS AS 'SPECIFIED CATEGORY OF ACTIVITIES':

The Department register certain activities related to commercial exploitation and value addition of Agro/ Horticulture/Animal Husbandry/ Pisciculture/Sericulture/Floriculture/Bio-Technology/Agri-business/Tourism and other allied sectors as 'Specified Category of Activities' promoted by bonofide Himachalis and certified as such by the concerned Government Department(s).

The applicant Enterprise shall apply to the Director/ DDI/ GM,DIC/SWCA, as the case may be, on the application form being used for the acknowledgement Micro, Small & Medium Enterprises and application form for Large Scale Enterprises, depending upon the proposed level of investment in Plant and Machinery/Equipments. The Department will forward the said application to the concerned Department (Departments of Agriculture/ Horticulture/ Animal Husbandry/ Fisheries etc. as the case may be) for certifying that the project is covered under the definition of ‘Specified Category of Activities’. The Department will register these projects on provisional basis and maintain registration record of such activities separately. Such ‘Specified Category of Activities’ will be permanently registered after commencement of commercial production and will be issued Eligibility Certificate giving detail of commencement of commercial production and incentives and concessions as applicable. In case any activity included in ‘Specified Category of Activities’ is also acknowledged as an Industrial Enterprise under the provisions of the MSME Act 2006 it will be only entitled to avail of those incentives and concessions which are provided to New Industrial Enterprises under these Rules.

The following incentives and concessions will be available to such New Enterprises registered on permanent basis as a specified category of activities:

i)     Concessional rate of electricity duty.

ii)   Interest subsidy @ 5% p.a. on term loan and working capital with a ceiling of Rs. 1 lakh p.a. for a period of 3 years.

iii)  Fixed capital Investment Subsidy @ 15% subjectto a maximum of Rs. 5 lakh on cost of structure, building, plant and machinery.

iv)  Sanction of water and electricity connection on priority.

v)    Exemption from the payment of Luxury tax and Entertainment tax (as applicable) for a period of 5 years from the date of commencement of commercial production.

 

VI.

FREIGHT SUBSIDY SCHEME-2013

The Govt. of India has now notified fright Subsidy Scheme-2013 vide notification no. 11(5)2009-DBA-II/NER, dt. 22/01/2013 this has come into force from 22/01/2013. The salient feature of this scheme is provided grant of 75% freight subsidy to all eligible enterprises except for the enterprises in the negative list of freight subsidy scheme for a a period of 5 year from the date of commencement of commercial production on transportation cost of raw material and finished goods limited to and from factory site to designed nearest broad gauge rail head. The benefit is also extended to all eligible existing enterprises on their substantial expansion.

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Source: Official Website of MSME, Last Updated on 17 - 11 - 2017

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