Subsidies and other Incentives to Industries in NER and J&K and Special Category States

Incentives provided to existing and new industrial units in North-Eastern Region including Sikkim and the Special Category State of Jammu & Kashmir include the Capital Investment Subsidy, Central Interest Subsidy, Comprehensive Insurance Subsidy, Excise duty exemption and Income Tax exemption. For the Special Category States of Himachal Pradesh and Uttarakhand incentives of Capital Investment Subsidy, Excise duty exemption and Income Tax exemption are provided. In addition, Transport Subsidy Scheme (recently modified as Freight Subsidy Scheme, 2013) is applicable to the above mentioned States as well as Andaman & Nicobar Islands, Lakshadweep Islands and Darjeeling district of West Bengal to provide subsidy on transport cost incurred on movement of raw material and finished goods.

The date of expiry of each of the schemes are as under:

(I) The schemes under NEIIPP, 2007 will expire on 31st March, 2017.

(II) The Transport Subsidy Scheme, 1971 has been replaced by the Freight Subsidy Scheme (FSS), 2013

(III) Freight Subsidy Scheme, 2013 will terminate after five years from the date of its publication i.e. this scheme will expire on 21.01.2018.

(IV) The Package for J&K comprising the Capital Investment Subsidy, Interest Subsidy and Comprehensive Insurance subsidy has expired on 14.6.2012. Income tax exemption was allowed to all new units for initial period of 5 years. Thereafter, 30% for Companies and 25% for units other than Companies, for a further period of five years, under Section 80- IB of Income Tax Act,1961 was allowed. The scheme was valid till 31st March, 2012. 100% Central Excise Duty exemption with CENVAT benefit for a period of 10 years available to new industrial units as well as to the existing units on substantial expansion.  The scheme was valid till 14th June 2012.

(V) Capital Investment subsidy under Package for Himachal Pradesh and Uttarakahand has expired on 6.1.2013. 100% income tax exemption for an initial period of five years and thereafter 30% for companies and 25% for other than companies for a further period of five years under Section 80-C of Income Tax Act, 1961 was allowed.  Central Excise Duty exemption: 100% exemption on outright basis to the industrial units set up or expanded in these States was available till 31.03.2010.

Details of subsidies provided during the last three years are as under:

(I)           The schemes under NEIIPP, 2007- Annexure-I

(II)          The Transport Subsidy Scheme, 1971-Annexure-II

(III)         Freight Subsidy Scheme, 2013 -nil.

(iv)         Package for Jammu & Kashmir – Rs.106.54 crore till 18.03.2013

(v)          Package for Himachal Pradesh Rs.156.27 crore  till 18.03.2013

(vi)         Package for Uttarakahand  Rs.101.06 crore till 18.03.2013

Annexure-I

ANNEXURE REFERRED TO IN REPLY TO PART (c) OF THE  RAJYA SABHA UNSTARRED QUESTION  NO. 2489 FOR  ANSWER ON 20.3.2013.

Subsidy provided during last three years under the Schemes under North East Industrial Investment & Promotion Policy (NEIIPP), 2007: (Till 31.10.2012)

(Rs. In crores)

Sl. No. Name of State TOTAL
1. Arunachal Pradesh 4.37
2. Assam 109.28
3. Manipur 0.11
4. Meghalaya 80.01
5. Mizoram 0.60
6. Nagaland 1.03
7. Sikkim 5.70
8. Tripura 2.35

ANNEXURE II

ANNEXURE REFERRED TO IN REPLY TO PART (c) OF THE  RAJYA SABHA UNSTARRED QUESTION NO. 2489 FOR ANSWER ON 20.3.2013.

Subsidy provided during last three years under TRANSPORT SUBSIDY SCHEME, 1971 :

(Rs. In crores)

Sl. No. Name of State/UT Total
1. Himachal Pradesh 46.08
2. J&K
3. Uttarakhand
Total 46.08
1. Arunachal Pradesh 114.21
2. Assam 442.94
3. Manipur 4.53
4. Meghalaya 322.73
5. Mizoram 7.79
6. Nagaland
7. Tripura 2.04
8. Sikkim 5.78
Total 900.02
1. A&N Islands 0.49
2. Lakshadweep
3. West Bengal (Darjeeling District)
 Total 0.49
Grand total 946.59

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Tags: Andaman & Nicobar IslandsArunachal PradeshExciseHimachal PradeshIncome taxJammu and KashmirLakshadweepSikkim

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