The Odisha government would study the provisions and incentives contained in the industrial policy resolutions (IPRs) of other states to revise its existing IPR-2007.
The prevailing IPR of the state is being revised to make it more investor friendly especially for those in the MSME (micro, small and medium enterprises) sector. The government was also mulling to incorporate some provisions in the IPR to pull investors from non-metallurgical sectors since a bulk of the investments proposed were in core manufacturing industries like steel and aluminium.
"Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) has been asked to carry out a study on IPRs of other states to know their best practices and incentives. The study will be done through a consultant appointed by UK-based Department for International Development (DFID)", said an official source.
Earlier, the state government had approved an amendment to para 18.2 of IPR relating to operational guidelines on exemption of entry tax.
As per the revised norms, new micro and small enterprises (MSEs) will be exempted from payment of entry tax on purchase of raw material for a period of five years from the date of starting commercial production. The exemption will be subject to a ceiling of 100 per cent of fixed capital investment.
Thrust sector units excluding deemed thrust sector units will also be considered for a similar incentive on a case-to-case basis with the concurrence of finance department and approval of the State Cabinet. The IPR has defined thrust sectors as ones that offer huge employment opportunities, maximize value addition and have a multiplier effect in terms of ancillary and downstream linkages.
The MSEs will also enjoy waiver on entry tax on acquisition of plant and machinery for setting up of industrial units. Besides this, an industrial unit seized under Section 29 of State Financial Corporations Act, 1951 and thereafter sold to a new entrepreneur on sale of assets basis and treated as new will be eligible for exemption of entry tax prescribed for the respective sector.
MSEs need to submit applications for exemption of entry tax on acquisition of plant and machinery within two years from the date of starting first fixed capital investment or obtaining industrial license, whichever is earlier.
For availing entry tax waiver on purchase of raw materials, the units need to submit applications within six months of commencement of commercial production.
The IPR-2007 had delineated a multi-pronged approach for industrial promotion by providing infrastructure support, institutional support and pre and post-production incentives. While the IPR was designed to support industrialization in general, it stressed on efforts to incentivise investment in thrust and priority sectors with a view to maximizing the triple objectives of value addition, employment generation and revenue augmentation.
