Interest Subsidy to Textile Industries in Gujarat
1. Name of the Scheme:
The Scheme for financial assistance by way of credit linked Interest Subsidy in Ginning & Pressing, Cotton Spinning, Weaving, Dyeing & Processing, Knitting, Garment/Made-ups, Machine Carpeting, Machine Embroidery and any other activities/ process like crimping, texturising , twisting, winding, sizing etc. within the Textile value chain.
2. Operative Period
From Dt. 05/09/2012 to Dt. 04/09/2017
3. What are the eligible activities to get the benefit?
The textile manufacturing units of following type only will be eligible for financial assistance under the Scheme:
Spinning activities means setting up of unit having the raw material as 100% cotton OR with blended of any textile fibres OR any kind of spun yarn based on the cotton spinning system or technology from Blow room to Yarn packaging (Winding). Spinning operation can be performed on Ring spinning, Rotors or Jet Spinning.
Ginning & Pressing, Weaving (with or without preparatory) Dyeing &Processing, Knitting, Garment /Made-ups Machine Carpeting, Machine Embroidery and any other activities/process like crimping, texturising, twisting, winding, sizing etc. within the Textile value chain.
Investment in Plant & Machinery as specified in the updated list of machinery under TUF scheme of Government of India from Time to Time or as decided by State Level Approval Committee (SLAC)..
4. Who is eligible to get the benefit?
The textile manufacturing units of above eligible activities are eligible to get benefit under this scheme for following
For establishing new enterprises which commence commercial production during operative period of the scheme. OR
For carrying out expansion or diversification with investment more than 50% of its existing gross fixed capital investment with or without forward / backward integration.
For Modernization of existing unit by investing more than 25% of its existing gross fixed capital investment of plant & machinery to upgrade technology by way of adopting new technology/ production process and/or improving quality of products Synthetic filament yarn manufacturing is excluded under the scheme. In alternative such units may avail MSME or other state Govt. Scheme.
5. Assistance available
Maximum interest subsidy will be at the rate of 5% per annum for five years. (7% for Spinning unit and garment/made-ups unit) for for five years.
6. Other Conditions
- For the purpose of interest subsidy, the enterprise shall get term loan from Financial Institution/ Bank recognized by Reserve Bank of India.
- The enterprise applying within one year of loan disbursement will be eligible.
- Disbursement of the loan should be within the operative period of the Scheme.
- The enterprise must start commercial operation within the operative period of the scheme.
- This interest subsidy will be in addition to any other incentives available from other schemes of Government of India.
- The interest subsidy will be available only on interest levied by the Financial Institution. Penal interest or other charges will not be reimbursed.
- The interest subsidy will be for five years OR for the period of repayment of loan whichever is earlier.
- The interest subsidy will be given to the enterprise which pays regular installments and interest to the financial institutions. If the enterprise becomes defaulter, it will not get interest subsidy for the default period and such defaulting period will be deducted from 5 years period. The defaulter will be considered as per RBI.
- Disbursement will be made only after unit commences commercial production.
- Unit will have to remain in commercial production/services at least for 10 years from the commencement of commercial production.
- If unit has any pending Government dues, it will not get assistance under this scheme unless it pays all such pending dues.
- All the benefiting enterprises shall file information about annual production, sales, power consumption and such other details as may be asked by DIC on 31st of March annually.
7. Scheme -1 Power tariff subsidy
Power tariff subsidy @ Rs. 1 per unit in billed amount of the utility for the units for 5 years for cotton spinning industries & weaving units for establishing new or expansion or diversification of existing enterprises and units with second hand eligible imported machineries as mentioned in para 5.3(ii) and 5.3(iii).
The subsidy will be paid to utilities by Industries Commissionerate after verification of claims.
The enterprise setting up captive power plant will be given assured supply of lignite by GMDC for period of five years from date of production.
8. Scheme -1 VAT Concession
Refund of VAT by unit on purchase of intermediate product /raw material (except for certain goods and transactions not eligible for tax credit under The Gujarat VAT Act 2003) Remission of tax collected on end product/intermediate product within entire value chain from cotton to Garment and made ups. 100% of eligible investment in plant & machinery made within one year. Two years in case of investment more than Rs. 500 crores. Concession will be from the date of production. The concession will be available within 8 years from the date of production. Eligibility certificate for VAT concessions will be issued by the Industries Commissionerate. In case of VAT/and CST replaced by Goods and Service Tax or any other similar law the interest of unit will be adjusted.
9. Check List
For Sanction of interest subsidy, the unit will have to submit the following documents:
1. Application in the prescribed format
2. Copy of EM No. / IEM No. Acknowledgement
3. Registration detail of the applicant (partnership deed/ memorandum & articles of association/ society framework)
4. Copy of term loan sanction letter of financial institute/Bank Appraisal Report
5a. Detailed Project report, covering project profile, details of equipments & machineries, fixed capital investment, etc., CA Certificate of investment.
5b. In case of expansion/diversification/modernization, CA certificate certifying details of existing investment as well as investment made in expansion / diversification / modernization.
6. Details of Govt. dues and out standings if any
7. Details of court cases
8. Necessary documents signed by the authorized signatory as may be requested.
For disbursement claim, the unit will have to submit following documents:
1. Prescribed certificate from financial institute, as per Annexure -2 OR Relevant Bank Statement
2. Letter of loan first installment disbursement of financial institute
3. Copy of Consent letter from Gujarat Pollution Control Board
4. Copy of first sale bill month wise Production/Sale/Power consumption details duly verified by DIC.
5. Sanction letter Conditions compliances.
6. Necessary documents signed by the authorized signatory