State approves liberal package of fiscal incentives for industries
To give filip to industrialisation in the state, the Punjab government announced its new incentive-based Industrial Policy-2013. Under the policy, the state has approved a liberal package of fiscal incentives for manufacturing sector, integrated textile units, agro and food processing sector, electronics hardware and information Technology.
According to the policy, the state will offer incentives on VAT and CST, electricity duty, stamp duty, property tax, purchase tax (on select commodities), market fees, rural development fund (RDF) and infrastructure development cess.
For the first time, emphasis has been given on the development of SMEs, with a capital investment of Rs 1 -10 crore. Under this category, the maximum cumulative quantum of incentive is 50 per cent of the total fixed capital investment.
Unveiling the policy, the Punjab Deputy Chief Minister Sukhbir Singh Badal described it as aggressive, incentive based policy that besides changing the paradigm of Industrial Development would facilitate the investment in the state.
Terming it as 'Earn Your Incentive' Policy, Sukhbir added that Punjab has taken a proactive step to facilitate the investment in the state by offering maximum incentives than any states. Badal said that New Industrial Policy focused on three points Incentives, Simplifying Procedures and facilitation. He said that all earlier steps of screening committee and empowered committee have been eliminated with Punjab becoming the first state to provide online approvals in most transparent manner.
Giving the details of the incentives, Badal said that for manufacturing sector, Punjab has been divided into two zones with zone I which is less industrialized and Zone II which is highly industrialized. Describing the incentives for zone I Badal said that manufacturing units Fixed Capital Investment (FCI) from Rs 1 to 10 crore would be eligible for 50 per cent of VAT plus 75 per cent of CST retention for 7 years and for units having FCI Rs 10 crore to 25 crore these benefits would be for 8 years.
Units having FCI from Rs. 25 crore to 100 crore would be eligible for 60 per cent of VAT plus 75 per cent of CST retention with maximum of 60 per cent of FCI for 10 years and units with FCI from Rs 100 crore to 500 crore, VAT incentives would be 70 per cent plus 75 per cent of CST retention with maximum of 70 per cent of FCI for 11 years. A new category of units with FCI above Rs 500 crore has been created that would enjoy 80 per cent of VAT incentive plus 75 per cent of CST retention with maximum limit of 80 per cent of FCI for 13 years. In addition these units would have 100 per cent exemption in Electricty Duty, Stamp Duty and Property Tax.
For Industry in Zone II units with FCI of Rs 10 to 25 crore would enjoy 25 per cent VAT plus 50 per cent of CST retention for 8 years, units with FCI of Rs 25 to 100 crore would have 30 per cent of VAT and 50 per cent of FCI for 10 years, units with FCI Rs. 100 to 500 crore would have 35 per cent of VAT and 50 per cent of CST retention for 11 years and units with FCI above 500 crore would enjoy 40 per cent of VAT and 50 per cent of CST retention for 13 years besides 50 per cent exemption in electricity duty, stamp duty and property tax.
Further, for Agro/Food Processing industry, besides enjoying all benefits of zone I of manufacturing sector would also have Mandi Fee, Rural Development Fee, Infrastructure Development Cess incentives besides purchase tax incentives on wheat and milk. It has been decided that no purchase tax would be levied on wheat and milk purchased and processed in the state. It has also been decided that no VAT/Entry Tax will be charged on farm equipments.
In a major step to make SAS Nagar Mohali and Amritsar as IT hub of the state, he announced incentives including VAT incentives, ensuring 24 hour power, Stamp Duty, Property Tax exemption and exemption from Punjab Pollution Control Board, exemption from all labour laws etc.
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