Introduction:
Maharashtra has introduced a detailed policy for both manufacturing and services sector. This article explains the incentives for the service sector, including support for rent, salaries, EPF, and utilities, aimed at boosting jobs and investment in the state.
Policy Validity & Scope
Valid for five years or until a new policy is introduced. Covers 16 priority manufacturing sectors, 13 priority service sectors, and emerging industries.
Area classification (A/B/C/D/D+) is retained from the Maharashtra Package Scheme of Incentives 2019.
Eligibility Criteria for Service Sector Units
Units are classified by Taluka/Area group (A through D+) and by scale. The minimum direct employment required (number of employees) to qualify is shown below.
| Taluka / Area | MSME | Large | Mega | Ultra-Mega |
| A & B | 350 | 750 | 1,500 | 3,000 |
| C | 250 | 500 | 1,000 | 2,000 |
| D | 150 | 350 | 750 | 1,500 |
| D+ | 125 | 200 | 500 | 1,000 |
| # Others (Vidarbha, Marathwada, etc.) | 100 | 150 | 350 | 400 |
| * No Industry / Naxal / Aspirational Districts | 50 | 125 | 250 | 350 |
# Vidarbha, Marathwada, Ratnagiri, Sindhudurg, Jalgaon & Dhule
* Dharashiv, Gadchiroli, Washim, Nandurbar (No Industry / Naxal / Aspirational Districts)
Key Employment Conditions
- Minimum direct employment must be achieved within 2 years from commencement of services.
- Employment must be maintained throughout the entire incentive period.
- At least 80% of employees must be local persons (as per GR ELP-2008/C.No.93/Ind-6, dated 17 Nov 2008).
Only direct on-roll employees working at the eligible premises qualify
What’s on the Table
The policy provides six distinct categories of fiscal support. Here is a breakdown of each:
1. Rental Lease Subsidy
Available to new service sector units. Up to 50% of rental or lease costs reimbursed, subject to caps and an eligibility limit of the first 20 units per district:
| Group | Subsidy | Cap | Eligibility |
| D / D+ | Up to 50% | ₹1 crore | First 20 units/district |
| C | Up to 50% | ₹10 crore | First 20 units/district |
| A & B | Up to 50% | ₹20 crore | First 20 units/district |
2. EPF Reimbursement
Employer-side EPF contributions reimbursed for high-value employees. Available to the first 500 eligible units, capped at ₹10 crore per unit. Additional subsidies apply for hiring local persons, women, and persons with disabilities.
| Group | Salary Threshold | Benefit |
| D / D+ | Above ₹50,000/month | 50% employer EPF for 5 years |
| C | Above ₹75,000/month | 50% employer EPF for 5 years |
| A & B (Mumbai) | Above ₹1,00,000/month | 50% employer EPF for 5 years |
3. Stamp Duty Exemption
| Group | Exemption |
| C / D / D+ | 100% exemption for new and eligible service sector units |
| A & B | 50% exemption on first lease/conveyance deed (Mega & Ultra-Mega units only) |
4. Electricity Duty Exemption
| Group | Exemption Period |
| C / D / D+ | 5 years |
| A & B | 3 years |
5. Skilling Subsidy
Applicable only to Mega and Ultra-Mega units, covering up to 100 employees per unit:
| Group | Subsidy | Cap | Employee Limit |
| D / D+ | 50% | ₹2 crore | 100 |
| C | 50% | ₹1 crore | 100 |
| A & B | 50% | ₹1 crore | 100 |
6. R&D and Innovation Subsidy
Dedicated R&D Fund for Services – ₹300 crore has been earmarked
It is part of a ₹1,000 crore state R&D fund, with ₹300 crore reserved specifically for the services sector. Provides up to 50% reimbursement of eligible R&D costs, capped at ₹10 crore, payable in 10 instalments. Applicable to DSIR-recognized Mega and Ultra-Mega service units with a minimum 2% turnover investment in R&D.
Why This Policy Matters for Service Businesses
This is the services sector component of Maharashtra’s broader Industries, Investment and Services Policy 2025 — and it’s a meaningful departure from traditional manufacturing-focused incentive regimes.
The policy is deliberately employment-led. Subsidies are linked to salary thresholds and headcount rather than just investment size, which means the reward scales with the quality and quantity of jobs created. The 80% local hiring requirement also ensures that growth translates to tangible community benefit.
The tiered area classification — offering richer incentives in C, D, and D+ zones — creates a genuine economic case for locating operations outside Mumbai and Pune. For businesses open to Tier-2 and Tier-3 locations, the financial advantages are substantial.
For Mega and Ultra-Mega units, the addition of skilling subsidies and R&D reimbursement signals that Maharashtra is not just after investment volume — it wants innovation-driven, future-ready enterprises.
Key reminder
All incentives are subject to meeting employment thresholds within 2 years, maintaining those numbers throughout the policy period, and ensuring 80% local hiring compliance.
******
Reach out to our team: CA Kapil Gokharu +91 99300 09415 | kapil@apkg.co.in OR CA Abhishek Pokharna +91 98207 34416 | abhishek@apkg.co.in
Author Bio
