GOVERNMENT OF PONDICHERRY

ABSTRACT

Department of Industrial Development (Industries and Commerce)–Incentives for Promotion of Thrust Area Industries – in the Union Territory of Pondicherry – Orders – issued.

DEPARTMENT OF INDUSTRIAL DEVELOPMENT (INDUSTRIES AND COMMERCE)

G.O.Ms. No.4/2003-Ind.                                Pondicherry, dated 3/4/2003

READ: I.D.No.J-17/1/IND/T-1/2002 dated 26-09-2002- from

the Director of Industries & Commerce, Pondicherry.

ORDER :

Industrial growth propels the growth of the economy distributing prosperity, providing employment to the unemployed and increasing the standard of living of the population. The Government of Pondicherry has been taking various steps to promote industrialisation viz. Simplification of procedures and constitution of Committees under the Chairmanship of the Chief Secretary and Secretary to Government to (1) monitor the issue of clearances (2) establishment and maintenance of adequate and suitable infrastructure , and (3) grant of fiscal incentives and tax holidays.

2. In order to sustain the industrialisation process and to attract more investments in the territory from within India and abroad, it is proposed to provide Capital Investment Subsidy for the Thrust Area Industries.

3. The following have been identified as Thrust Area Industries:-

1. Information Technology

2. Electronic Industries

3. Bio – Technology Industries

4. Food Processing Industries

5. Agro Processing including Marine products

6. Leather products and Footwear

7. Light Engineering including Auto Components

8. Textiles including garments

4. A separate package of incentives for the growth of IT industries has already been announced vide G.O. Ms No. 2/2002- Ind. dated, 16/05/2002 and the guidelines for the grant of investment subsidy etc., have been detailed in G.O. Ms. No.11/2002-Ind dated 06-11-2002 of the Department of Industrial Development (Industries and Commerce), Pondicherry.

5. The Director of Industries and Commerce, Pondicherry has now submitted a proposal for the grant of investment subsidy for the other thrust area industries and requested for approval for implementation of the scheme prepared for the said purpose.

6. After careful consideration and taking into account various factors, the Lieutenant Governor, Pondicherry is pleased to accord approval for the scheme namely "Capital Investment Subsidy Scheme for Thrust Area Industries" for the industries mentioned under para 3 above. However the IT industries units shall continue to be covered by the scheme announced vide G.O Ms No. 2/2002- Ind. Dated 16/5/2002 and G.O.MS.No.11/2002-Ind dated 06-11-2002. The details of the pattern of assistance of the scheme are as follows :

1. Short Title.

(1) Commencement:-This scheme shall be called "The Pondicherry Capital Investment Subsidy Scheme for Thrust Area Industries, 2003".

(2) It shall come into force at once

2. Area of Operation – This scheme shall be in operation in the whole of the Union Territory of Pondicherry.

3.    CAPITAL INVESTMENT SUBSIDY

3.1 Eligibility:-

1.  This scheme shall be applicable to the new industrial units in the industries identified as Thrust Area Industries in para 3 above for the investments made on Plant and Machinery @ 20% thereof subject to a maximum of Rs 20.00 lakhs during the period of operation of the scheme.

 

For the purpose of this clause, new industrial unit means an industrial unit which has made investment on eligible assets and starts production during the period of operation of this scheme.

 

2.  Existing units of Thrust area industries undertaking expansion, diversification and modernisation shall also be eligible for subsidy for the investments on eligible assets during the period of operation of the scheme.

For the purpose of this clause, existing unit means an industrial unit which has commenced production before the commencement of this scheme.

3.2 Procedure for claiming subsidy.

3.2.1 The Industrial unit should register the claim in the prescribed form (Proforma - I) with the Department of Industries prior to taking effective steps for setting up of new unit / undertaking expansion, diversification and modernisation.

3.2.2 The subsidy shall be claimed in the prescribed form as in Proforma II

3.2.3 A State Level Committee will go in to the merits of the each case to decide whether the industrial unit qualifies for the grant of incentive and will also determine the quantum of incentive/ subsidy admissible to the unit. The State level committee is authorised to sanction incentive / subsidy not exceeding the level prescribed in the scheme and to condone the delay in making the application for subsidy. The composition of the State Level Committee shall be as under:-

1. The Secretary to Govt. (Industries & Commerce) Chairman

2. The Managing Director, PIPDIC Member

3. The Deputy Secretary/ Under Secretary to Govt. ( Finance) Member

4. Head of the Electronics Dept., Pondicherry Engg. College. Member

5. The Director of Agriculture, Pondicherry Member

6. Head of Bio – Technology Department, Pondicherry University Member

7. The Director of Industries & Commerce Member Secretary

3.3 Ineligible Investment:

The following investments shall not be considered eligible for any incentives, namely:-

(1) Working Capital

(2) Commissioning fee

(3) Goodwill fees

(4) Royalty

(5) Preliminary and Pre-operative expenses.

(6) Capitalised Interest

(7)Technical know-how fee.

3.4 GENERAL CONDITIONS:

3.4.1.   For expansion and diversification to be eligible for investment subsidy, the same should be different from routine replacement. ‘Modernisation’ refers to replacement of existing machinery with new machinery partially or fully with same make or with different make. The expansion, diversification and modernisation should have been carried out as per a definite project report and over a predefined period of time. While expansion, diversification and modernisation must result in at least 25% increase in plant and machinery in Gross Block terms, expansion must also result in at least 25% increase in capacity.

3.4.2 In the case of modernisation, the eligible fixed capital investment for subsidy shall be fixed after deducting the higher of written down value or sale value of the scrapped items. In computing the ceiling, the investment subsidy given to the unit under any other scheme of any Department / Agency of Union Territory Govt., including under Central Investment Subsidy Scheme shall be considered.

3.4.3 The plant and machinery, electrification costs, and testing equipment shall be admitted to investment subsidy on the following basis:

3.4.3.1  All brand new identifiable items of plant and machinery including tools, jigs and moulds shall be eligible for investment subsidy. All claims in this regard shall be supported by a certificate by the Chartered Accountant with regard to cost of materials and fabrication charges. Plant and machinery on hire- purchase from National Small Industries Corporation shall be eligible for investment subsidy on the basis of original value. Second hand imported machinery shall be eligible for investment subsidy provided the claim is supported with clear import documents and an affidavit that subsidy has not been availed of from Central Government or any State or Union Territories for these items of machinery. Diesel Generation set shall also to be considered as part of machinery for the purpose of computing the investment for subsidy. Goods vehicles used for the transportation of raw materials and end products shall be eligible for subsidy. Vehicles of other categories, items of office equipment, furniture, grates, pallets and consumable stores shall not be eligible for subsidy.

3.4.3.2 All testing equipments shall be eligible for investment subsidy. Claim on this account can be considered independently without having to be a part of expansion, diversification and modernisation subject however to the per unit investment subsidy ceiling of Rs 20 lakhs.

3.4.3.3 Electrification costs shall be eligible for subsidy. Transformer costs and costs of Industrial wiring including that for Diesel Generation Set shall be eligible for investment subsidy. These costs should be evidenced by invoices, cash receipts, and where industrial wiring costs and electrification exceeds Rs.50,000/- by a certificate of valuation from a Chartered Engineer or an officer not below the rank of an Assistant Engineer, Electricity Department, Pondicherry.

3.4.3.4 Transportation and erection charges shall not be considered for the purpose of computing investment subsidy.

3.4.4. A Chartered Accountant should certify the investment on Plant and Machinery in the prescribed form as in Annexure –I of Proforma II and a certificate from the concerned financial institution as in Annexure – II of Proforma II should also be submitted.

3.4.5 The Capital Investment Subsidy shall be disbursed in four equal installments over a period of four years

3.4.6 The subsidy amount shall be disbursed to the financial institution/banks only, if the unit is financed by them, towards the adjustment against the loan availed by the entrepreneurs.

3.4.7 The beneficiary shall execute an agreement in the prescribed format (Proforma-III) with the Directorate of Industries and Commerce

3.4.8  A Unit which has availed investment subsidy from Central Government. or any other agency shall not be eligible to apply for subsidy again under this scheme.

3.4.9 The industrial unit shall have to continue production for a period of five years from the date of agreement. However, if the unit does not remain in continuous production on account of the reasons beyond the control of the management, the unit shall present its case before the State Level Committee as an individual case on which the Committee can take decision to waive the period of discontinuance of production on the representation made.

3.4.10 The industrial unit shall not transfer or dispose of the plant and machinery in any manner till the completion of 5 years from the date of agreement.

3.4.11 The industrial unit shall have to furnish the details of production, employment and other information every year before 30^th June or from time to time as sought by the Industries Department.

3.4.12 The unit availing of the subsidy shall have to recruit local persons to the extent of a minimum of 60% of the total strength. The percentage of the above mentioned employment will have to be maintained by the industrial unit during the eligibility period of the incentives.

3.4.13 The State Level Committee shall resolve the issues of interpretation, dispute or quarrel under the scheme.

3.4.14 Industrial units shall apply for investment subsidy within six months of commencement of commercial production or completion of diversification/ expansion / modernisation.

3.4.15 Investment subsidy to the industrial units is liable to be refunded by the units with interest @ 14% per annum on issue of registered demand notice to the units by the Director of Industries and Commerce on grounds of obtaining subsidy by mis-representation, forgery, deception or if the unit is not found working for 5 years after receipt of subsidy or for violation of conditions of agreement. All amounts due to the Government under this provision shall, in case of default, be recoverable as arrears of land revenue under the provisions of the Revenue Recovery Act. Sufficient opportunity to show cause shall however be granted to the units before a demand is raised against it.

Sd/-

(P.M. EMMANUEL)

UNDER SECRETARY TO GOVT. (IND & COM)

To

The Director of Industries & commerce, Pondicherry.

Copy to: 

1. All secretaries 2. Head of Department 3. Secretary to Lt. Governor

4. Secretary to Hon’ble Chief Minister 5. Private secretary to Speaker

6. Private Secretary to all Ministers 7. Private Secretary to Deputy Speaker

8. Finance Department 9. Directorate of Accounts & Treasuries 10. Office of

the Accountant General 11. Central Record Branch 12. Spare 13.G.O

ANNEXURE- I

(see para 3.4.4)

Name of the Chartered Accountant(s):

We hereby certify that………………………………………………………………( Name of the Industrial unit) have acquired the following machinery for their unit at …………………………………………………………………………………….. (Address) for the manufacture of …………………………………………………………….. (Name of the product) by the Industrial unit.

Item of fixed assets Value (Rs)

1. Lease hold/free hold land :
2. Cost of development of the land :
3. Building under construction:- :

1. Amount paid to the building contractors :
2. Amount paid for building materials :
3. Amount paid for wages and salaries etc. for the building construction :
4. Architect’s fee :

1. Electrical Installation :
2. Plant and Machinery.

1. Value paid for items at site (break up details to be furnished separately).

 

2. Advance payments to machinery suppliers (break up details to be furnished separately).

1. Loading, unloading, transportation, octroi duties, Erection expenses etc.
2. Pre-operative expenses to be capitalised. :
3. Preliminary expenses to be capitalised.
4. Share Capital subscribed :
5. Miscellaneous fixed assets :

(a)

(b)

(c)

(d)

We have checked the books of accounts of the unit, the invoices etc., and certify that the aforesaid information furnished above has been verified and found to be true. We also certify that all the aforesaid items have been paid and no credit is raised there against in the books of the unit.

CHARTERED ACCOUNTANTS

ANNEXURE – II

(see para 3.4.4)

Certificate from the concerned financial institution/bank in the following form duly signed by responsible officer.

Certified that M/s…………………………………………………have been disbursed on this date loan amounting to Rs…………… sanctioned under letter No………………………

Dated……………… as shown below:

                                                                                                                    Rs. P.

1) Total amount disbursed upto date :

2) Value of fixed capital investment :

(i) Land :

(ii) Building :

(iii) Plant & machinery :

(iv) Other assets, Tools, Jigs, Dies and Moulds: and Goods Carriers.

                                                  Total:

                                                                    Signature of the Agent or Manager

                                                                    (Name of the Institution)

PROFORMA – I

(See para 3.2.1)

APPLICATION FOR REGISTRATION OF CLAIM FOR THE GRANT OF 20% CAPITAL INVESTMENT SUBSIDY FOR THRUST AREA INDUSTRIES

Name of the unit :

Address for Communication :

Location of the Unit :

Name of the Product(s) :

SSI Provisional Registration/IEM/IL/No. and date :

Project cost (Tentative ) :

Land :

Building

Plant & machinery :

Details of Finance : PIPDIC/Financial Institution/Bank/Own

Anticipated date of commencement of production./

Completion of modernisation, diversification :

I/We hereby request to register our claim for the grant of 20% investment subsidy.

                                                                                    Yours faithfully,

                                                                                (Signature with seal)

To

The Director of Industries & Commerce,

Thattanchavady,

Pondicherry.

PROFORMA –II

(see para 3.2.2)

APPLICATION FOR DISBURSEMENT UNDER THE 20 PER CENT CAPITAL INVESTMENT SUBSIDY SCHEME FOR THRUST AREA INDUSTRIES

1. Name of the applicant :

Phone: :

Fax :

e-mail :

3. Name & Address of t he Industry :

Phone: :

Fax :

e-mail :

4. Whether sole proprietorship/

Partnership/Pvt. Ltd /Public Ltd., :

5.  Name of the products manufactured(Approved) :

6.  Date of commencement of production (Copies of

SSI PMT registration/commencement of

production certificates to be enclosed) :

7.  Whether the Project of the new unit

     has been approved by the financial

     institutions /Banks* : Yes/No

If yes furnish the details

(i)

(ii)

(iii)

8.     The cost of the project approved by the above institution /bank and the details of fixed 

         assets acquired are as under :

---------------------------------------------------------------------------------------------------------------------

Cost of the Project                                                    Self – financed by financial institution

As approved

---------------------------------------------------------------------------------------------------------------------

                                                                                                Rs. P.             Rs P.

(A) Total fixed capital investment

1. Land

2. Building

3. Plant & Machinery

4. Other assets

1. Tools, Jigs and moulds

2. Goods carriers

3. Other assets

1. Promotional and Pre-operative expenses capitalised

or to be Capitalised.

 

(B) Margin money for working capital

                                                                                                       ---------------------------------

Total cost---

                                                                                                       --------------------------------

(vi) Certificate from the financial institution / bank in Annexure – II is enclosed Yes/No

9. In Case Expansion/Diversification / Modernisation

Quantity Value

(i) Pre-expansion/diversification/

modernisation capacity :

(ii) Post-expansion/diversification/

and modernisation capacity :

(iii) Percentage increase :

(iv) Period during which expansion/diversification/ From To

modernisation executed :

(v) Date of re-starting production after completing

expansion/diversification/modernisation :

(vi) a) Investment considered for subsidy before

expansion/diversification/modernisation :

      b) Investment in the course of expansion/

          diversification/modernisation :

10. Plant & Machinery:

11. Performance of the Unit:

12. Employment proposed or likely to be created is as follows:-

1. Managerial
2. Supervisory/Technical
3. Workers

Skilled

Semi-skilled

Unskilled

(d) Others

13. The following certificates have been appended :

1. A Certificate from chartered accountant M/s …………………certifying the extent of share capital subscribed and paid up value of fixed assets, if any, acquired and paid for as stated above.
2. A copy of the latest audited accounts of the unit is also enclosed herewith.

14. I/We hereby agree that, I/We shall forthwith repay the amount disbursed to me/us under this scheme, I/We hereby agree to repay forthwith such excess amount, if the amount of 20 percent investment subsidy is found to have been disbursed in excess of the amount actually admissible for whatsoever reason. Further, I/We shall also be liable to pay interest at such percent and such other charges/expenses which may be payable by me/us.

15. It is hereby further certified that I/we have not hitherto applied for or have received any amount by way of grant or subsidy in respect of this unit from any other Department/ Agency of Government of Pondicherry/ Govt. of India.

16. I/We hereby agree that I/we shall not transfer/ dispose of the machinery /Unit for a period of five years from the date of agreement. In the event of shifting I/we agree to pay the subsidy amount along with penal interest at such rate as may be prescribed by the Govt. from time to time.

17. Agreement

                                                                                Signature of the applicant.

                                                                                Name of the Signatory.

                                                                    For and on behalf of (Name of the Unit)

Proforma – III

(see para3.4.7)

DEED OF AGREEMENT

THIS DEED OF AGREEMENT made on this the day

of Two thousand and BETWEEN

hereinafter called ‘’ THE BENEFICIARY’’ which expression shall include wherever the context so admits, his successors and assigns, of the one part and the President of India, represented by Director of Industries, Pondicherry, hereinafter called " The Director" which expression shall include wherever the context so admits, his successors in office and assigns of the other part.

WHEREAS the Government of Pondicherry have formulated a scheme namely, "Capital Investment Subsidy Scheme for Thrust Area Industries" (hereinafter referred to as the Scheme), with a view to sustaining the industrialisation process and to attract more investments in the Union Territory from within India and abroad.

AND WHEREAS the Beneficiary is one of those who has applied to the Government for the grant of subsidy under the scheme in respect of an Industrial undertaking (established at

for the manufacture of

AND WHEREAS the State Level Committee has considered the application of the Beneficiary at its meeting held on and has decided to sanction a sum not exceeding Rs. (Rupees

Only) as subsidy under the above Scheme on the terms and conditions contained in the sanction letter No. dated a copy of which duly attested by both the parties is attached hereunto and is to be read as forming part and parcel of this Agreement;

NOW THEREFORE THIS DEED WITNESSETH AND IT IS HEREBY AGREED AND DECLARED AS FOLLOWS:

In consideration of the decision taken by the Committee agreeing to grant to the Beneficiary an amount not exceeding Rs. (Rupees only) as subsidy, the Beneficiary hereby convenants with the

Government as follows:-

1. That the Beneficiary shall utilise the Subsidy for the purpose for which it is granted, i.e.for the creation of Fixed assets and shall also furnish to the Director a Certificate of utilisation within a period of six months from the date of receipt of the amount;

 

2. That the Beneficiary shall submit half-yearly progress Reports to the Director about the working of the industrial under-taking for a period of five (5) years in such manner as may be prescribed by the Director of Industries, Pondicherry;

 

3. That the Beneficiary shall furnish all the information and assistance as may be required by the Director or by any of his Officers or his representatives in relation to the business of the Industrial Undertaking or its accounting and other arrangements and shall for that purpose afford all facilities to the Director or to any Officer or representative for the inspection of books, accounts and other documents of the Industrial undertaking at all reasonable times upto the end of the 5^th year from the date on which the industrial undertaking goes into production or from the date of execution of this agreement whichever is later;

 

4. That the Beneficiary after receiving a part or whole of the subsidy shall not, without obtaining the prior written permission of the Director of Industries change the location of the whole or any part of the Industrial undertaking or effect any substantial contraction or disposal of a substantial part of its total fixed capital investment within a period of five (5) years from the date on which the Industrial undertaking goes into production or from the date of execution of this agreement whichever is later; and

 

5. That the Beneficiary shall refund the Subsidy together with interest or other charges, if any, to the Government of Pondicherry, if it is proved to the satisfaction of the Director that the Beneficiary has violated any of the covenants mentioned herein or that the Subsidy has been obtained by fraud or by misrepresentation as to an essential fact or by furnishing of false information or if the Industrial undertakings goes out of production for a period exceeding six months during any year within five (5) years from the date of commencement of production or else the amount due will be recovered as arrears of land revenue under the Revenue Recovery Act.

 

6. That the Beneficiary should refund to Government any overpayment by the disbursing agency on account of investment subsidy made in excess of actual entitlement upon being intimated of the fact by the disbursing agency.

IN WITNESS WHEREOF the parties hereunto have signed this agreement on the date respectively mentioned against their signatures.

BENEFICIARY

Witnesses:

1.

2.

Signed and executed

For and on behalf of the President of India

Director of Industries and Commerce, Pondicherry

Witnesses:

1.

 

2.