Guidelines for Production Linked Incentive (PLI) Scheme for Automobile and Auto Component- The Ministry of Heavy Industries has recently released an amendment to the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component industry. Dated 31st August 2023, this official notification revises the scheme initially put into place in September 2021. The amendments touch on key elements like Domestic Value Addition, FAQs, Weighted Average Discount, and the definition of Non-Originating Material and Services.
MINISTRY OF HEAVY INDUSTRIES
NOTIFICATION
(AMENDMENT)
New Delhi, the 31st August, 2023
S.O. 3857(E).— In partial modification of the Scheme Guidelines for the Production Linked Incentive (PLI) scheme for Automobile and Auto Component industry which was notified by the Ministry of Heavy Industries vide S.O. No. 3947(E) dated 23rd September 2021, the following amendments are made with effect from date of its publication in the Official Gazette:-
Amendment of sub-paragraph 2.26 to be read as under :
Para 2.26 : Domestic Value Addition: The term “Domestic Value Addition” will be construed as the percentage of manufacturing activity being undertaken in that referred part of the supply chain. It will be certified by Testing agency of MHI. % Domestic Value Addition = [{Adjusted Ex-factory price of the product – (minus) Adjusted Import content} / Adjusted Ex-factory price of the product] x 100, where,
Ex-Factory Price shall mean price of the product at the factory gate, before applicable taxes. CIF shall mean Cost, Insurance and Freight.
Adjusted Ex-factory price of the product = Ex-factory price of the product – (minus) Total Exempted Import as per FAQs – (minus) Weighted Average Discount in excess of the dealer/ channel margin.
Adjusted Import content = Import content i.e. sum of CIF value of all non-originating materials and services including royalty in the final product including non-creditable import duties – (minus) Total Exempted Import as per FAQs.
The entire calculation above is net of GST.
After sub-paragraph 2.27, sub-paragraphs 2.28, 2.29 & 2.30 will be added, namely :
Para 2.28 : Frequently Asked Questions (FAQs): FAQs are the queries raised during interactions/stakeholder consultations with applicants and auto industry associations. These queries have been compiled in the form of FAQs in this Scheme and published by MHI from time to time.
Para 2.29 : Weighted Average Discount: It is the weighted average of discounts offered by the applicants on the AAT product to their dealers / distributors in the last 12 months.
Para 2.30 : Non-Originating Material and Services: Material and Services whose country of origin is other than the country in which that material / service is used in manufacturing and any material / service whose origin cannot be determined.
[F. No. 12(11)/2020-AEI (21370)]
HANIF QURESHI, Jt. Secy.
