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GOVERNMENT OF RAJASTHAN FINANCE (Tax Division) DEPARTMENT |
No. F.4(18) FD/Tax Div/ 2001 Jaipur, Dated:
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ORDER Amended version of Rajasthan Investment Promotion Policy–2003,
click Rajasthan Investment
Policy-2003 |
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RAJ INVESTMENT PROMOTION POLICY - 2003 |
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With a view to provide investors an attractive opportunity to invest in the State of Rajasthan, the following scheme is introduced in the State : 1.
TITLE : The scheme shall be known
as "The Rajasthan Investment Promotion Scheme 2003
(RajInvest-2003)," hereinafter referred to as the Scheme. 2.
OPERATIVE PERIOD : The scheme shall come into
operation with effect from 1st July, 2003 and shall remain in force upto 31st
March 2008. 3.
APPLICABILITY OF THE SCHEME : The scheme shall be applicable to all
new investments and investments made by existing units and enterprises for
modernization/ expansion/ diversification, subject to the condition that such
units shall commence commercial production/ operations owing to such
investment during the operative period of the scheme. 4.
DEFINITIONS : (a) "Commercial Bank" means any
nationalised or scheduled Bank set up under the Banking Rules and Regulation
Act, 1949; (b) "Commencement of
first Commercial Production/ Operation" means (in case of units
which are liable to deposit Sales Tax, CST or VAT) the date on which the unit
makes the first payment of Sales Tax, CST/ VAT or (in case of units other
than those paying Sales Tax, CST or VAT) any other tax paid for the first
time to the State Government in respect of investment to which subsidy/ exemption
is linked; (c) "Conversion Charges" means the
conversion charges payable to Govt. and shall not include any part of such
charges payable to local bodies. (d) "Co-operative Bank" means any Bank set
up under the Rajasthan Co-operative Societies Act, 1965; (e) "DIC" means District Industries
Centre; (f)
"Diversification" means launching of a new and different
product or services by the same unit with the help of new set of machines in
the case of industrial units or provision of new services by a unit in
service sector with an additional fresh borrowing exceeding rupees ten lacs
or investment in new land and building valued at more than rupees ten lacs. (g) "Electricity
Duty"
means the duty payable under the Rajasthan Electricity (Duty) Act, 1962; (h) "Employment" under this scheme will
means direct employment on wage or on salary or on other terms for at least
250 days in a financial year in connection with which deductions have been
made and paid by the employee and the employer in the approved provident
fund. (i)
"Entertainment Tax" means the tax payable under the Rajasthan
Entertainments and Advertisements Tax Act, 1957; *(j)
"Expansion" means minimum fresh additional borrowing of rupees
ten lacs or investment in new land & building valued at more than rupees
ten lacs. (k) "Ineligible Unit" means the
unit listed in Annexure-I appended to this order; (l) "Investment" means investment
of funds (whether borrowed from designated institutions i.e. commercial banks
or State or Central Government financial institutions or from own resources)
in any unit/ project having commercial, or industrial output of goods or
services, or projects set up for such common social good * as are duly
recognized by the Government by an order in this respect as a qualifying
sphere of activity. *(m)”Loan/
Borrowing" means any long-term loan or advance where the terms under
which money is loaned or advanced provide for repayment along with interest
thereon. Such loan/ borrowing should be meant for creation of fixed assets
and shall not include working capital loan, overdraft, and current
liabilities. Loan/ borrowing shall be obtained from scheduled commercial
banks and/ or financial institutions of the State or Central Governments. (n)"Luxury
Tax" means the tax payable under the Rajasthan Tax on Luxuries (In
Hotels and lodging Houses) Act, 1990; (o)"Mandi
Cess" means the fee being levied and paid under the Rajasthan State
Agriculture Produce Market Act, 1961. (p) "Modernization" means any improvement in
the existing industrial or service unit, by minimum borrowing of rupees ten
lacs in the fixed assets. (q) "Prescribed
Authority" means an Authority prescribed in Clause 6 of the scheme. _________________________ *Amended
vide FD order dated 12.11.2003 *Amended
vide FD order dated 12.11.2003 *Order
issued dated 12.1.2004 |
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(r)
"Repayment of dues in time" means repayment of term
loan and interest thereon as per the schedule of repayment prepared by the
financial institution(s) at the time of sanction of loan, or as per the revised
schedule of repayment, if any. Provided that any eligible
unit which gets any relief or concessions such as waiver of interest/ penal
interest/ liquidated damages granted subsequent to the original schedule of
repayment shall be entitled to get subsequently reduced benefit as per fresh
entitlement under the scheme with effect from the date on which such
entitlement stands reduced, and benefits drawn if any shall be surrendered to
the Government or recoverable by due process. Provided further that for
an overdue amount not exceeding 10% of the quarterly installment, for reasons
of reconciliation, the repayment shall be deemed to have been made in time
for the purpose of the scheme. (rr) "Revival
of a sick industrial unit" means re-commencement of production
by a sick industrial unit and (i)
an improvement in the net-worth upto 10% in the first year, 15% in
the second year and 25% in the third year; OR (ii)
a gradual reduction in net cash losses; OR(iii)
on attainment of production level to the extent of 50% in the first
year, 75% in the second year and 100% in the third of its installed capacity; AND Providing employment to
the extent of 50% in the first year, 75% in the second year and 100% in the
third year of the maximum level of employment attained in the preceding 3
years from the date of its declaration as a sick industrial unit. (s) "RFC" means Rajasthan Financial
Corporation. (t)
"RIICO" means Rajasthan State Industrial Development & Investment
Corporation Ltd. (tt) "Sick
Industrial Unit" means- (i)
an industrial unit declared sick before 01.04.2004 as per the
guidelines issued by RBI from time to time; OR (ii)
an industrial unit which has been declared sick before 01.04.2004 by
the Board for Industrial and Financial Reconstruction (BIFR) under the
provision of the Sick Industrial Companies Act, 1985, and by the State Level
Committee or the appropriate District Level Committee, in the Industries
Department in case of non-BIFR cases; OR (iii)
an industrial unit which has been taken over before 01.04.2004 and
sold to a new management by RIICO/RFC/Central Financial Institutions. (u) "Stamp Duty" means the duty defined as
stamp duty payable under the Rajasthan Stamp Law (adaptation) Act, 1952. (v) "Wage/ Salary" means the consideration
paid to an employee by an employer and includes basic pay, dearness allowance
but does not include bonus, medical reimbursement, surrender leave, overtime,
transport allowance or any other allowances. Only such payments to employees
by the employer as are accompanied with deposit of approved provident fund
shall qualify as wage and salary for the purposes of the scheme. (w) "Wage/ Employment
subsidy" means (i)
twenty five percent of the total wage/ salary being paid by the
investor with respect to such workers for whom employee and employer both are
contributing towards approved provident fund OR (ii)
in case the investor is not availing interest subsidy thirty percent
or the amount of the total wage/ salary being paid by the investor with respect
to such workers for whom the employee and employer are both contributing
towards approved Provident Fund, shall be paid back, into the account of the
investor by the State Government under the scheme subject to a maximum of 50%
of the sales Tax, CST or VAT liability. ________________________ *
Amended vide
FD order dated 12.11.2003 (x) "Subsidy" means and include
interest subsidy as well as wage/ employment subsidy sanctioned under the
scheme. (y) "Worker" means any person, other
than the directors, promoters, owners and partners, in employment of an
eligible unit and making contribution to the approved provident fund. *5 ELIGIBILITY
: The benefit s (subsidies
as per Clause 7 and exemptions as per Clause 8) under this scheme shall be
available to all units, other than those covered in the list of ineligible
units subject to the fulfillment of the following conditions: (i)
the term loan sanctioned by the State/ Central financial
institution(s) and/ or scheduled commercial Bank (s) including co-operative
Bank(s), has been sanctioned and utilized during the operative period of the
scheme; (ii)
the unit shall have a minimum borrowing for investment of Rs. 10 lacs
or having an investment of at least Rs. 10 lacs in land and building
calculated on the basis of DLC/ RIICO rate for land, and Rs. 3228/- per
sq.metre (Rs. 300/- per sq.ft.) for building, during the operative period; (iii)
to claim wage/ employment subsidy the unit shall provide: (a) direct employment to at
least ten persons in case of a new unit; and (b) twenty five percent
additional direct employment subject to a minimum of ten persons in case of
diversification, modernization or expansion. (iv)
the unit shall be eligible for interest Subsidy and/ or Wage/
Employment Subsidy only if it commences first commercial production/
operation during the operative period of the scheme; (v)
there has been no default in repayment of dues against term loan of
the concerned financial institution(s) and/ or Bank(s); and (vi)
the applications as required under this scheme are presented with
full particulars and supporting documents, as required, before the
appropriate authority within 90 days of commencement of commercial
production/ operation of the project in respect of which the interest/ wage/
employment subsidy is sought. Such commercial production/ operation should
however commence during the operative period of the Scheme, i.e., on or
before March 31st, 2008. 5A. Eligibility in case of
sick industrial units.- Notwithstanding anything contained contrary to
the provisions of the Scheme, if the owner himself or the new management in
case of units purchased from RIICO/RFC/ Central Financial Institutions starts
the process of revival of a sick industrial unit before 01.04.2005 it shall
be eligible under the provisions of the Scheme to claim the benefit of the
interest subsidy as provided under clause 7 and the benefit of exemption in
electricity duty as provided under clause 8 of the Scheme. ______________________ *
Amended vide
FD order dated 12.11.2003 |
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6. AUTHORITY TO GRANT BENEFITS
UNDER THE SCHEME:, The prescribed authority for determining the eligibility under this Scheme shall be the following Screening Committees, whose decisions, subject to other provisions of the Scheme, shall be final: : |
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S.No. |
Investment
amount |
Prescribed
Authority |
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1. |
Investment
above Rs. 7.00 crores |
State
Level Screening Committee (SLSC) consisting of the following : a) Pro Secretary,
Industries/ Chairman Secretary Industries
b) Secretary, Finance
(Rev.)/ Member Special Secretary Finance (Rev.) c) Commissioner, Commercial
Taxes Member d) CMD, RFC or
Representative, Member not below the rank of ED e) CMD or Representative of
RIICO Member not below the rank of ED f)
Commissioner / Director, Member-Secretary Industries
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2. |
Investment
up to Rs. 7.00 crores |
District
Level Screening Committee (DLSC) consisting of the following : a) District Collector Chairman b) Concerned Branch Manager
of Member RFC in the District
c) Concerned Senior Regional Manager/ Regional Manager of Member
RIICO
in the District d) Deputy/Asstt.
Commissioner, Commercial Taxes/Commercial Member
Taxes Officer (CTO)
e) General Manager DIC Member Secretary |
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7. SUBSIDIES: (i)
(a) In case of new investments made,
the sum total of interest subsidy and wage/ employment subsidy would be
subject to a maximum limit of fifty percent of the tax payable and deposited
under the Rajasthan Sales Tax Act, 1994, the Central Sales Tax Act, 1956 and
Value Added Tax Act as and when introduced in the State, (i) (b) In case of investment made in Modernization
/ Expansion / Diversification, the amount of subsidy shall be subject .to a
maximum of fifty percent of the additional amount of Rajasthan Sales Tax and
the Central Sales Tax or VAT payable or deposited by the unit over and above
the highest tax payable or deposited whichever is higher, in any of the three
immediately preceding years. * provided that the
maximum limit of fifty percent prescribed under clause 7(i)(a) and clause
7(i)(b) may be raised by the BIOI (Board of Infrastructure Development &
Investment Promotion, Government of Rajasthan) to sixty percent in such cases
where the investments exceed Rs. 100 crores but are less than or equal to Rs.
200 crores; and this maximum limit may be raised further to seventy five
percent in cases where the investments exceed Rs. 200 crores. **(ii) Subject to clause (i), interest subsidy
shall be 5% (percentage points). An additional interest subsidy of one
percent shall be available to Schedule Caste/ Schedule Tribe entrepreneurs.
In case the documented rate of interest is less than 5% or less than 6% in
case of SC/ST entrepreneurs, the entitlement of the interest subsidy will be
limited to the documented rate of interest and the amount actually paid as
interest but shall not include penal interest. (iii) The Subsidy shall be available to the
investors for seven years from the date of first repayment of interest in
case of Interest Subsidy, and first payment of wages/employment in case of
wage employment subsidy. In case of Expansion / Modernization / Diversification,
the unit shall be eligible for subsidy under the scheme from the date of
payment of sales tax over and above the highest sales tax paid in the
immediately preceding three years before such Expansion / Modernization /
Diversification, ***(iv) Where a unit has claimed and/or is availing
benefit of the Interest Subsidy, the Wage/Employment Subsidy/'shall be
available to the extent of twenty five percent of wages/salary paid by the
investors ,to workers for whom the employee and employers are both
contributing in the approved provident funds. However, in case of the unit is
not claiming or availing Interest Subsidy, the amount of wage/ employment subsidy shall
be thirty percent of the wages/salary paid to the workers for whom the
employee and employer are contributing for the approved provident funds, _______________________________________ * Amended vide FD order
dated 22.10.2003. ** Amended vide FD order dated
19.8.2003. ***Amended vide FD order dated
12.11.2003. |
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provided however that notwithstanding
anything contained in this clause, wage/employment subsidy in the case of
diversification/expansion or modernisation shall be available only with
respect to additional numbers of such worker engaged for whom the employee
and the employer are both contributing in the approved provident funds, and provided further that such additional
number of workers in the case of diversification, modernisation or expansion
is at least twenty five percent of the existing direct employment subject to a
minimum of ten additional persons as already provided under Clause
5(a)(iii)(b) of this Scheme. (v) For Interest Subsidy the interest
actually being paid on the additional capital borrowed shall be the only
basis for the computation of subsidy. In case of Wage/Employment Subsidy the
wages/salary paid for the additional employment generated shall be the basis
for the computation of Wage/Employment Subsidy. 8. EXEMPTIONS: In addition to the
subsidies available under clause 7, the eligible beneficiary shall be
entitled to claim the following exemption, if applicable: (i) 100% exemption of luxury tax for seven
years; (ii) 50% exemption of entertainment tax for seven years; (iii) 50% exemption of electricity duty for seven years; (iv) 50% exemption from stamp duty. (v) 50% exemption from conversion charge; and /
or (vi) 50% exemption from mandi tax for seven years. These exemptions shall be granted by the
prescribed authority under the scheme and shall be indicated in the
entitlement certificate. 9. PROCEDUCRES: (A)
CLAIM OF EXEMPTIONS OF STAMP DUTY AND
CONVERSION CHARGES: (i)
An investor intending to make new investment or intending to make new investment for
Expansion/Modernization/Diversification,
being entitled to
claim exemption
of stamp duty
and/or conversion
charges under this Scheme, shall submit a duly completed application in the prescribed Form, to the Member
Secretary of the appropriate Screening Committee (SLSC/DLSC). Such application shall be accompanied by a project report duly certified by a chartered accountant. _____________________________________ * Amended vide FD order dated 4.11.2003. (ii)
The member Secretary of the appropriate Screening Committee, shall
register the application and issue Provisional Entitlement Certification in
prescribed format to the applicant
investor immediately with a copy to the concerned department/ authority.
Thereupon, the stamp duty and/or conversion charges/ fee would be exempt to the extent of fifty percent of
the duty leviable or the fee chargeable. (B) CLAIM OF SUBSIDES: (i)
A unit entitled to claim subsidy under this Scheme should submit duly
completed application in prescribed Form, to the Member Secretary of the
appropriate Screening Committee ( SLSC/DLSC). Such application shall be accompanied
with the following documents, as may be applicable., (a) Loan sanction letter
issued by the term leading institution(s)/banks(s); (b) Proof of investment in
case of self finance and (c) Approved Provident Fund
deposit receipt. (ii)
The Member Secretary shall complete the formalities for placing the
completed application before the appropriate Screening Committee within
fifteen days from the receipt of the application. Where an application has
not been completed within 15 days such cases shall separately be placed before the committee
with reason. Note : The District Level Screening Committee or the
State Level Screening Committee, as the case may be, on being satisfied may
condone the delay not exceeding 180 days in filling of the application form
the prescribed date of application. (iii)
The Screening Committee shall dispose of the application within
fifteen days of its presentation by the Member Secretary. If the Committee
approves the case, the Member Secretary shall issue Entitlement Certificate
in the prescribed format, within three days of such decision and convey the
decision to all concerned Departments, financial institutions, Banks,
Assistant Commissioner/ Commercial Taxes Officer of the Circle where the
dealer is registered under the RST/CST/VAT provisions, for necessary
compliance. (iv)
In case the Committee rejects the application, the same shall be
communicated to the applicant within a week of the date of such decision. (v)
The Assistant Commissioner/ Commercial Taxes Officer of the area
where the eligible unit is registered, shall be the Nodel Officer to give
effect to the decision of the Screening Committee. (vi)
The units declared eligible for availing subsidies under the Scheme,
shall submit an application to the Assistant Commissioner/ Commercial Taxes
Officers for claiming the subsidy who shall provide the subsidy as per the
order of the Government issued in this regard. _______________________________________ * Amended vide FD order
dated 12.11.2003 (vii) The payment of interest
subsidy shall be made only for the period for which the unit deposits State
and / or Central sales tax and / or and makes regular repayment of loan and
interest due to the financial institution(s). Subsidy shall be disallowed for
the period the unit defaults in depositing sales tax or defaults in regular
repayment of loan or interest. It shall be restored on the recommendation of
the Assistant Commissioner / Commercial Taxes Officer from the Commercial
Taxes Department and the concerned Financial Institution in case such unit
clears all its over dues, and starts making regular repayment of sales tax
and the term loan / interest. |
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(C) CLAIM OF EXEMPTIONS OF LUXURY TAX,
ELECTRICITY DUTY, ENTERTAINMENT TAX AND MANDI FEE: *(i)
An eligible investor seeking the benefit of exemption of luxury tax,
electricity duty, mandi cess, and entertainment tax shall within 60 days of
the expected date of commencement of commercial production/operation apply to
the Member-Secretary of the appropriate Screening Committee under this Scheme,
submit a duly completed application in the prescribed form along with a
project report duly certified by a chartered accountant. (ii) The Member Secretary of the appropriate
Screening Committee, shall register the application and issue Entitlement Certificate
in prescribed format to the eligible investor immediately with a copy to the
concerned department / authority. Such Entitlement Certificate shall indicate
all subsidies and tax concessions admissible to the applicant. All tax
authorities shall allow concessions and subsidies as per the Entitlement
Certificate issued under the scheme. 10. TERMS & CONDITIONS: The Interest Subsidy
and/or Wage/Employment Subsidy sanctioned and paid under the Scheme and the
exemption of luxury tax, electricity duty, mandi tax, entertainment tax,
stamp duty, conversion charges and other benefits availed under the Scheme
shall be subject to the following conditions. Breach of any of these
conditions shall make the subsidy/exemption amount liable to be recovered as
tax or arrears of land revenue/along with interest @ 18%** per annum from the
date from which the subsidy was provided. (a) The unit availing
Interest and/or Wage/Employment Subsidy and availing exemption of luxury tax,
electricity duty, mandi tax, entertainment tax, stamp duty, conversion
charges and other benefits under the Scheme shall comply with all statutory
laws and regulations. Non-compliance may result in cancellation/ withdrawal
of the benefits under the Scheme. _____________________________________ * Amended vide FD order dated 4.11.2003. ** Amended vide FD order dated 15.10.2003 (b)
The unit availing Interest and/or
Wage/Employment Subsidy and availing exemption of luxury tax, electricity duty, mandi
tax,entertainment tax, stamp duty, conversion charges and other benefits
under the Scheme shall be subject to the conditions, procedures,
instructions, classifications, or amendments issued from time to time under the
Scheme. (c) If
any subsidy under any other scheme of Government of India or Government of
Rajasthan is received by the unit in respect of interest payment, or as a
wage! employment subsidy then the total subsidy payable under the scheme
shall be reduced to the extent of subsidy so received. Note: Interest @ 5 percent per
annum would be payable to investor in case the payment of subsidy is delayed
for a period of more than 30 days once the subsidy release order is issued. 11. AUTHORITY FOR
IMPLEMENTATION I INTER'PRETATION: All the related departments shall
implement the scheme. The Industries Department shall act as the nodal
coordinating, 'monitoring and implementing department. Any matter pertaining
to interpretation of any Clause of the Scheme shall be referred to the
Government of Rajasthan in the Finance Department whose decision shall be
final in such a matter. 12. REVIEWS AND APPEAL: The State level Screening
Committee and District level Screening Committee, described under clause 6 of
this Scheme, shall also be empowered. 'to review their decision, The State
level Screening Committee shall hear and decide appeals against the orders of
District level Screening Committee. Provided that the aggrieved party has
filed review
application or the appeal within the period of 60 days from the date of communication of the
decision of the committee. 13. REVISION BY THE STATE
GOVERNMENT: (a) The State Government in Finance Department
may suo motu or otherwise revise an order passed by any Screening Committee
wherever it is found to be erroneous and prejudicial to the interest of the
State revenue, after affording an opportunity of being heard to the
beneficiary industrial unit. (b)
No order
under the sub-clause (a) shall be passed by the State Government after the
expiry of a period five years after the date by which the benefits under this
scheme are fully availed of. 14. REVIEW OR MODIFICATION OF SCHEME : The
State Government in the Finance Department reserves the right to review or
modify the Scheme as and when needed in public interest. By order, (M.D. Kaurani) Additional Chief Secretary |
Annexure-I
List of industries not eligible for theInterest Subsidy and/or Wage/Employment Subsidy and/or Exemptions under The Rajasthan Investment Promotion Scheme 2003
1.
Iron & steel re-rolling mills (excluding stainless steel
re-rolling mills) 2.
Oil extraction or manufacturing industry excluding solvent extraction
plants with or without refinery system. 3.
Mini Cement Plants upto the manufacturing capacity of 200 tonnes per
day. 4.
Granite in all its form. |