J&K Industrial Policy 2021-2023

Objectives of The Scheme

To take industrial development to the block level in (UT)of J&K, which is the first time in any Industrial Incentive Scheme of the GOI and attempts for a more sustained and balanced industrial growth in the entire UT.
Beneficiaries:
Scheme is made attractive for both smaller and larger industrial units.
Expenditure:
The financial outlay is 28,400 crorefor the scheme period 2020-21 to 2036-37 (17 years).
Role of J&K in Implementation:
Scheme envisages a greater role of the UT of J&K in registration and implementation of the schemewhile having proper checks and balances by having an independent audit agency before the claims are approved.

Incentives under J&K Industrial Policy

Subsidy on generator: 100% maximum of Rs 40/45 lacs in zone A and zone B. from 10 KW to 2000 KW capacity.
Pollution control device: 60% maximum of Rs 50 lacs.
Exemption on Stamp Duty and Court Fees: 100% (Also, exemption is available from payment of court fees for registration of documents relating to land transactions.)
Quality certificate: 30% of cost (ISO, ISI, BIS, FPO, BEE, AGMARK, ECOMARK, ZED etc.) maximum of Rs 2 lacs.
Automation: 25% of subsidy on capital expenditure incurred on (automation, software, hardware, business process re-engineering (BRP) through computers/IT/Online Pollution control devices maximum of Rs 2 lacs.
Green and environment protection incentive: 50% of the subsidy on the expenditure incurred on installation of new equipment of rain water harvesting, waste water recycling, zero discharge process/solid waste management
Marketing support
Other considerable benefits
Subsidized electricity (Rate of electricity for industries in the UT of J&K is Rs 3.50 approximately)

Capital Investment Incentive (CII):

New & Existing units with investment of not more than Rs. 50 crore in Plant & Machinery
A service sector unit will be eligible for this incentive only if it makes investment of not less than Rs. 1 crore in new building and other durable physical assets.

It provides an incentive at the rate of 30% in Zone-A (Maximum of Rs. 5 crore)
Incentive at the rate of 50% in Zone-B (Maximum of Rs. 7.5 crore)
On investmentmade in plant and machinery (in manufacturing), or construction of building and other durable physical assets (in service sector).
- Zone-Bincludes far-off areas and will receive higher incentives so as to ensure equal opportunities of growth in far-flung areas and major towns.
- Zone-Aincludes areas other than Zone-B.
A capital investmentis a sum of money that goes towards furthering the objectives of a business or towards purchasing long-term assets for the business.
An existing unit can avail this benefit for substantial expansion only once during the validity period of the scheme.

Capital Interest Subvention (CIS)

a) The incentive will be at an annual rate of interest of 6% for a maximum of 7 consecutive years from any date after the date of application for registration under this scheme.
b) But in future, if the annual rate of interest falls below 8%, an eligible unit will still be liable to pay a minimum amount of interest at the annual rate of interest of 2%.

Thus, in case the annual lending rate by a bank for an eligible unit falls to 7%, the amount of interest subvention will be limited to 5%, and the unit will bear 2% interest burden.

For manufacturing units only: Interest on loan up to the principal amount of Rs. 500 crores for investment in eligible plant and machinery shall be eligible for Capital Interest subvention.

Goods & Services Tax Linked Incentive (GSTLI)

Maximum Incentive: 300% of the investment made in plant and machinery (for manufacturing sector) or construction of building and other durable physical assets (for services sector).

Eligible GST: 100% of Gross GST, i.e., GST paid through cash and ITC for 10 years from the date of production/operation or till the validity of the scheme WEE. However, GST paid on exported goods or services will not be counted towards eligible incentive amount under this component.

Maximum Incentive in a Financial year: 1/10^TH of the total amount of eligible incentive subject to full payment of GST as per GST return filed for the claim period. In case GST paid more than 1/10^th of incentive, the balance can be carried forward to the next FY.

However, in a case the unit is not able to claim full eligible amount of incentives in the first 3 year, the same can be carried forward to subsequent years. However, this will not be carried forward beyond the eligible period of 10 years or beyond the validity of scheme, whichever is earlier.

Working Capital Interest Subvention(WCIS)

All existing units in the UT of Jammu & Kashmir registered under GST prior to the date of notification of this scheme will be eligible for this incentive.

Units located both in Zone A and Zone B in the UT of J&K are eligible for this incentive.

All existing eligible units can avail interest subvention @ 5% on working capital loan for a maximum of 5 consecutive years from the date of grant of registration under this scheme.

Existing eligible units availing benefits under this component will be eligible for five years period, even when they are undertaking substantial expansion.

The maximum benefit under this component for manufacturing as well as service sector units is Rs. 1 crore in 5 years.

NEGATIVE LIST

(i) All goods falling under Chapter 24 of the CGST Tariff Act, 2017 which pertains to tobacco and manufactured tobacco substitutes.

(ii) Pan Masala as covered under Chapter 24 of the Central GST Tariff Act, 2017.

(iii) Plastic carry bags of less than 20 micron as specified by Ministry of Environment and Forests.

(iv) Goods falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 produced by Petroleum or Gas refineries.

(v) Plantation, Refineries and Power generating Units above 10 MW.

(vi) Coke (including Calcined Petroleum Coke), Fly Ash.

(vii) Units not complying with environment standards, Forests and Climate Change, (SEIAA), Central/State Pollution Control Board.

(viii) Low value addition activities in goods such as preservation during storage, cleaning, operations, packing, repacking or re-labelling, sorting, alteration.

(ix) Gold and gold dore, (x) Molasses, (xi) Marble, Travertine & Granite, (xii) Revolvers and Pistols