Operational Guidelines For Production Linked Incentive (PLI) Scheme For Textiles Finalized

Government approved the Production Linked Incentive (PLI) Scheme for Textiles, with an approved outlay of Rs. 10683 crore over a five year period, to promote production of MMF Apparel, MMF Fabrics and Products of Technical Textiles in the country.  In this regard, the Operational Guidelines has been finalised and uploaded at http://texmin.nic.in/services/operational-guidelines-production-linked-incentive-pli-scheme-textiles-promoting-mmf-and

Ministry of Textiles will accept online applications under the PLI Scheme for Textiles w.e.f.  01st January, 2022, through PLI portal https://pli.texmin.gov.in/mainapp/Default. The application window will remain open from 01-01-2022 to 31-01-2022.

File No. 12015/03/2020-IT
Government of India
Ministry of Textiles

Dated: 28th December, 2021

Operational Guidelines for Production Linked Incentive (PLI) Scheme for Textiles for Promoting MMF and Technical Textiles segments in terms of Para 8 of the Notification dated 24.09.2021.

1. Introduction

1.1. Objective: The PLI Scheme is intended to promote production of MMF Apparel & Fabrics and Technical Textiles products in the country to enable textile industry to achieve size and scale; to become globally competitive and a creator of employment opportunities for people. The scheme is to support creation of a viable enterprise and competitive textile industry.

1.2. Production Linked Incentive (PLI) Scheme for Textiles has been Notified vide Notification No. 12015/03/2020-IT dated 24.09.2021 and published on 27.09.2021 in the Gazette of India. This scheme envisages incentive for production of MMF Apparel, MMF Fabrics and Technical Textiles Products manufactured in India. The list of Notified Product(s) is at Appendix-IA, IB and IC. The Scheme has come into effect from the date of its Gazette Notification.

1.3. After having due consultations with all stakeholders including DPIIT, NITI Aayog, Department of Commerce, Department of Expenditure, Department of Revenue, Export Promotion Councils and Trade bodies, these Scheme Guidelines are being issued for effective operation and smooth implementation in pursuance of Para 8 of the said Notification.

1.4. Empowered Group of Secretaries (EGoS), as constituted and Notified vide gazette Notification No. P 36017/144/2020-Investment & Promotion dated 10.06.2020 by the DPIIT will monitor the implementation of the scheme. The composition of the EGoS for monitoring of PLI for Textiles will be as under:

1. Cabinet Secretary, Chairperson

2. CEO, NITI Aayog, Member

3. Secretary, Department for Promotion of Industry and Internal Trade, Member Convenor

4. Secretary, Department of Commerce, Member

5. Secretary, Department of Revenue, Member

6. Secretary, Department of Economic Affairs, Member

7. Secretary, Ministry of Textiles, Member

The EGoS chaired by the Cabinet Secretary will monitor the progress of this PLI scheme; undertake periodic review of the outgo under the Scheme; ensure uniformity with other PLIs and take appropriate action to ensure that the expenditure is within the prescribed outlay. EGoS is also empowered to make any changes in the modalities of the scheme, and address any issue related to genuine hardship that may arise during the course of implementation, within the overall financial outlay of ₹ 10,683 crore.

2. Definitions

2.1. Applicant: Means any person including a company/firm/LLP/trust incorporated in India and interested in operating under the Scheme. The Applicant once selected under the scheme shall be required to form a new/separate company under Companies Act, 2013, and the new entity will be known as Participant.

2.2. Application: Means an application submitted by an applicant on the Ministry’s PLI portal developed for this purpose in the prescribed format.

2.3. Application Approval: Means the approval by the Ministry of Textiles(MoT) selecting the eligible entity under the scheme.

2.4. Auditor’s Certificate: Means the certificate issued by Statutory Auditor to verify the correctness of turnover declared, products manufactured, taxes paid, refund claimed and input tax credit availed, and to assess all required compliances.

2.5. Consumption and inventory Register: Means register for maintaining inventory and consumption of inputs and output records by the Participant;

2.6. Capital Goods: Mean, Goods the value of which is capitalised in the books of account of the Participant and which are used or intended to be used in the course or furtherance of business;

2.7. Chartered Accountant (CA): Means CA as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act,1949;

2.8. Cost Accountant: Means cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act,1959;

2.9. Company Secretary: Means Company Secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980;

2.10. Date of Commercial production: Means the date on which the Participant raises the first GST invoice for the sale of Notified Product(s) manufactured by the participant under the Scheme.

2.11. Financial Year: Means a year that begins on 1st April of a year and ends on 31st March of the following year.

2.12. Gestation Period: Means period allowed to the participating company for establishing the manufacturing and for commencement of production of Notified Products by investing minimum prescribed investment as declared in the application. Under the Scheme FY: 2022-23 to FY: 2023­24 will be the gestation period for Part-1 and Part-2.

2.13. Group Companies: As defined Companies Act, 2013.

2.14. Incentive: Means incentive to be provided to Participants under the Scheme as per the notified rates.

2.15. Input: Means any goods other than capital goods used or intended to be used for manufacturing of resultant notified products;

2.16. Investment: Means an amount of total investment in plant, machinery, equipment and civil works excluding land and administrative building cost, to be made by participant for setting up factory for manufacturing of Notified Products.

2.17. Letter of Approval: Means a letter issued by MoT for authorizing investment and commencement of production under the Scheme.

2.18. Manufacturing: In accordance with Central Goods and Services Tax (CGST) Act, 2017, manufacturing shall mean processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term “manufacturer” shall be construed accordingly. Trading/job-working shall not fall under the definition of manufacturing.

2.19. Notified Product(s): Specified HS lines of Manmade Fibre (MMF) Apparel and MMF Fabrics at 8 digits and products of Technical Textiles as detailed in Appendix-IA, IB and IC which are eligible for incentive under the scheme.

2.20 Person: Both natural and legal and includes an individual, firm, LLP, society, company, corporation or any other legal person;

Operational Guidelines For PLI Scheme For Textiles Finalized

2.21 Performance Year: Means the year in which minimum/threshold turnover or incremental turnover is achieved. 1st Performance year is FY 2024-2025; 2nd is 2025-2026; 3rd is 2026-2027, 4th is 2027-2028; and 5th is 2028-2029.

2.22 Project Management Agency (PMA): Means an agency appointed by Ministry of Textiles for assistance/support in implementation of the scheme.

2.23 Related Party(ies): Means as defined u/s 2(84) of the GST Act.

2.24 Minimum Investment: Means a threshold prescribed investment as per the Scheme.

2.25 Minimum Turnover: Means a threshold prescribed turnover for Performance Year 1.

2.26 Minimum Incremental turnover: Means a prescribed 25% incremental turnover over immediate preceding year from Performance Year 2 onwards. in the subsequent year.

2.27 Value-Addition formula: A-B VA=——– × 100=B

A= Products sale value declared in GST Invoice excluding GST

B= Purchase value of Inputs/raw materials excluding Duties/Tax/Cess

2.28 Raw material: Means input(s) required/used for manufacturing of Notified finished Products. These inputs may either be in a raw/ natural / unrefined/ unmanufactured or manufactured state;

2.29 Signatory: Means a person authorized to sign an application.

2.30 Minimum Value Addition: For the purpose of this Scheme, minimum value addition means 60% value addition in India for integrated or fibre/ yarn to fabric or fabric to garment; and technical textiles. However, for independent fabrics processing industry (dyeing and printing etc.) the required minimum value addition is 30%.

2.31 Turnover: Means sale turnover of a Company certified by the Statutory Auditor net of taxes. Value of products cleared under GST Invoices through normal banking channel from the sale of Notified Products would be taken into account for the purpose of this scheme. The Auditor certified turnover will have to be reconciled with audited balance sheet before end of 12 months for the year under audit.

3. Duration of the Scheme:

3.1 The Scheme is in operation from 24.09.2021 (Date of Notification) to 31 st March 2030 and the incentive under the Scheme will be payable for a period of 5 years only.

Year Gestation Period Performance year Incentives claim year
* FY 2022-2023
* FY 2023-2024 Optional* Optional*
1 FY 2024-2025 FY 2025-2026
2 FY 2025-2026 FY 2026-2027
3 FY 2026-2027 FY 2027-2028
4 FY 2027-2028 FY 2028-2029
5 FY 2028-2029 FY 2029-2030

3.2 In case of fast paced investment when threshold investment and threshold turnover is achieved by FY 2023-24, incentive may be payable in FY 2024-25 itself. However, in such cases, benefits of the Scheme shall be available upto FY 2027-28 only i.e. a total of 5 years only.

4 Scheme Details

4.1 Scheme Part- 1: Any person including Company/Firm/LLP/Trust willing to create a separate manufacturing company under Companies Act 2013, and invest minimum ₹ 300 Crore (excluding land and administrative building cost) to manufacture Notified Products. Such company will be eligible to get incentive when they achieve a minimum of ₹600 Crore turnover by manufacturing and selling the Notified products by the first Performance Year.

4.2 Scheme Part- 2: Any person including Company/Firm/LLP/Trust willing to create separate manufacturing company under Companies Act 2013, and invest minimum ₹ 100 Crore (excluding land and administrative building cost) to manufacture Notified Products. Such company will be eligible to get incentive when they achieve a minimum of ₹200 Crore turnover by manufacturing and selling the Notified products by the first Performance Year.

4.3 The Participant shall be eligible for the incentives on achieving threshold investment and threshold/incremental turnover.

4.4 Incentive shall be calculated on achieving threshold turnover as mentioned above in para 4.1/ 4.2 under the respective scheme in the first Performance Year. In case the prescribed conditions are not met in time, the incentive will be available from the year these are met, for a lesser number of years but rate of incentive applicable will be as prescribed to first year of the scheme and so on for remaining period.

4.5 Manufacture and sale of textile Products will be considered as permitted activities. However, turnover /sale of only Notified Products shall be considered for computation and availing incentive under the scheme. Account for both Notified and non-Notified Products will be maintained separately.

5. Incremental turnover and Incentive Rate:

5.1 Incentive under the Scheme will accrue on fulfilling conditions of minimum investment and minimum turnover

5.2 Rate of Incentives for a particular performance year are as indicated in Table 2.

5.3 Incentives in a particular year will be provided on achieving turnover as prescribed in Table 2 below for that year and, 25% additional incremental turnover over the immediate preceding year’s turnover, subject to a cap of maximum 35% admissible incremental turnover.

5.4 In case the participant company fails to achieve the prescribed turnover or 25% increase in turnover over immediate preceding year’s turnover, they will not get any incentive under this scheme for that year.

5.5 Such participants will get incentive only when they achieve both, i.e. the prescribed turnover target for the year and 25% increase in turnover over immediate preceding year’s turnover, in subsequent year for reduced number of years.

Table 2: Prescribed Turnover and Rate of incentive

Year Gestation Period Performance year Incentives claim year Scheme Part 1 Scheme Part 2
* FY 2022-

2023

Minimum Prescribe d Turnover Rate of incentive Minimum Prescribe d Turnover Rate of incentiv e
* FY 2023-

2024

Optional* Optional*
1 Year 1 FY 2024-

2025

FY 2025-2026 600 Cr 15% 200 Cr 11%
2 Year 2 FY 2025-

2026

FY 2026-2027 750 Cr 14% 250 Cr 10%
3 Year 3 FY 2026-

2027

FY 2027-2028 937.5 Cr 13% 312.5 Cr 9%
4 Year 4 FY 2027-

2028

FY 2028-2029 1171.87 Cr 12% 390.63 Cr 8%
5 Year 5 FY 2028-

2029

FY 2029-2030 1464.84 Cr 11% 488.2 Cr 7%

5.6 Illustrative but not exhaustive, examples are at Appendix III for ease of understanding and implementation.

6 Maximum Cap on incentive:

6.1 There will be a provision of cap of 10% over and above the prescribed minimum incremental turnover growth of 25% for the purpose of calculation of incentives from Year 2 onward. Turnover achieved beyond that cap will not be taken into account for calculation of incentive. However, for Year 1 the cap of 10% will be applied over and above turnover of two times of the investment made under the Scheme up to 2024-25. Turnover achieved beyond two times of investment + 10% shall not be accounted for calculation of incentives in Year 1. This shall apply to both Schemes Part 1 & 2.

6.2 Indicative illustrations are at Appendix III:

7. General conditions

7.1 The Applicant once selected under the Scheme shall form a new company under the Companies Act, 2013 before commencement of investment. This new company will be called “Participant” under the Scheme.

7.2 Investment made in anticipation from the date of Scheme Notification shall also be accounted for calculation of threshold investment provided their proposal is approved for participation under the Scheme. In case the required investment is not completed in gestation period then, balance committed investment can be made during first performance year, provided the required turnover is achieved simultaneously in the same year.

7.3 There will be no restriction for making higher investment for enhancing manufacturing capabilities and achieving growth target.

7.4 If multiple applications are filed by the same group companies, the entity will have to indicate their preference for proposal to be taken forward at the time of selection. Only one project under PLI will be approved for any group of companies.

7.5 The Applicant should have PAN/GST/DIN.

7.6 Participating company shall have to do minimum value addition as required under the scheme, in their own registered factory premises.

7.7 The Applicant shall declare the Notified ITC HS lines/ Technical Textiles Products as applicable they shall manufacture in the new participant company. Lines/Products once selected should be adhered to till Scheme duration. In case of any changes, prior approval of MoT will be required.

7.8 Turnover achieved from trading and job work will not be accounted for incentives under the Scheme.

7.9 Notified goods/Products manufactured by the registered company under the Scheme shall be eligible for the incentives. In other words, goods/Products manufactured by a company other than registered one, even of same group shall not be accounted for calculation of incremental turnover.

7.10 Notified Products sold under GST Invoice indicating 8 digit HS code shall only be taken into account for calculation of threshold/incremental turnover.

7.11 Participants are eligible to apply for other applicable Schemes administered by Government of India or the State Governments for example, duty remission, duty exemptions, duty drawback etc..

7.12 Foreign (non-resident) investment in the Participant’s Company shall be in compliance with the norms delineated under the Consolidated FDI Policy 2020, as amended from time to time.

7.13 Participant should commit for setting up of manufacturing facilities to manufacture Notified Product(s) along with appropriate quality and testing facilities having conformity to prescribed BIS Standards or any other International Standard.

7.14 The Participant, while dispatching Notified Products out of factory, shall ensure to put “Made in India” tag on each product.

7.15 The Applicant and its group company(ies) should neither have been declared as bankrupt or defaulter or reported any fraud by any bank or financial institution or non-banking financial company or placed under black list/denied entity list by any state or central Government department/agencies.

7.16 The sample scrutiny of claims of accounts and cost audit of companies (if required) shall be done by Ministry of Textiles through cost auditor. The Consent for audit of their manufacturing site/offices has to be submitted by the company.

7.17 The Participant shall maintain consumption and inventory register for inputs and use of raw materials for manufacturing Notified Products. The records shall be preserved for five years after availing incentive for each year or till audit is completed by Ministry, whichever is later.

7.18 The Participant shall indicate proper value of the product in the GST invoice on the basis of prevailing market value of the same products. Over-invoicing of products for gaining undue advantage of the Scheme would be viewed seriously and appropriate penalty will be imposed.

7.19 The Participant shall submit an undertaking duly Affirmed and Notarized while making application for incentives that statement and documents submitted are true and genuine.

8 Selection Criteria:

8.1 Ministry of Textiles shall invite applications from industry for selecting Participants for the Scheme. After screening of the applications, MoT shall publish the list of selected entities on the basis of recommendation of a Selection Committee under the Chairmanship of Secretary Textiles.

8.2 For examination of the application for selection, following grading system will be adopted by the Selection Committee:

SL
No
Criteria Grading Marks for Preference
1. Financial Capacity of the Applicant Based on Turnover and Reserves & Surplus in the balance sheet
(50:50%)
0 to 10
2. Relevant Experience &
Technical Capacity of the Applicant
Based on Experience  in MMF, Technical Textiles, Weaving/Processing /Garmenting etc  and General Technical
Capacity (50:50%)
0 to 10
3. Location of the Manufacturing Activity. (#) Preference to Investment in Aspirational Districts and Category “C” cities, as Notified by Ministry of Housing & Urban Affairs, (*) 0 to 15
Category A 05
Category B 10
Category C & Aspirational District 15
4. Investment Part-1 Part-2
300-400 100-200 10
401 and above 201 and above 20
5. Additional Direct Employment in 1st Performance Year onward 500 – 2500 5
2501-5000 10
5001-7500 15
7501 – 10000 20
Above 10000 25
6. Product line Single segment  investment only (such as only MMF Apparel or only MMF  Fabrics or only Technical Textiles) 10
investment in Integrated Weaving & Processing   or Fabric to garmenting 20
Total Maximum 100

# Change in location from Category A will be allowed to Category B or C and applicant in Category B will be allowed to change to Category C only and not vice-versa. However, if any proposed unit desires to shift the location of their investment in upcoming PM-MITRA Park, then that will be permitted under this Scheme without any change in time period under the Scheme. The participant is required to seek prior permission of MoT before changing the location.

* Category of Cities are as under:

Group ‘A’ cities Group ‘B’ cities Group ‘C’ cities
1. Greater Mumbai 1. Ahmedabad All other cities in India
2. Delhi NCR 2. Bhubaneswar except Group A & B
3. Kolkata 3. Chandigarh Cities
4. Chennai 4. Coimbatore
5. Bengaluru 5. Indore
6. Hyderabad 6. Jaipur
7. Pune 7. Kochi
8. Lucknow
9. Madurai
10. Mangalore
11. Nagpur
12.Thiruvananthapuram
13. Tiruchirappalli
14. Vadodara
15. Vishakhapatnam

8.3 “Letter of Approval” will be issued to the participant only after forming new company, as prescribed in para 7.1. and it is not transferable.

9. Selection Committee:

The Selection Committee will have the authority to select the applicants eligible to be the participants under the scheme. The Selection Committee will have the final authority in taking a decision on admissible turnover and eligibility for incentives or any other issue arising during the implementation of the Scheme

The composition of Selection Committee shall be as under:

1. Secretary Textiles-Chairman

2. Additional Secretary, Ministry of Textiles – Member

3. Additional Secretary and Financial Advisor-Member

4. Representative from NITI Aayog – Member

5. Representative DPIIT at the level of JS – Member

6. Trade Advisor-Member Secretary

7. Economic Advisor-Member

10 Condition of Investment

10.1 Plant, Machinery and Equipment: Investment in Plant, Machinery and Equipment under these guidelines shall include Investment on new plant, machinery, equipment and associated utilities as well as tools, dies, molds, jigs, fixtures (including parts, accessories, components, and spares thereof) of the same, used in the design, manufacturing, assembly, testing, packaging or processing of any of the manufactured Notified Product(s). It shall also include expenditure on packaging, freight / transport, insurance, and erection and commissioning of plant, machinery, equipment, and associated utilities. Associated utilities would include captive power and effluent treatment plants, essential equipment required in operations areas such as Water & Power supply and control systems. Associated utilities would also include Information Technology (IT) and Information Technology enabled Services (ITeS) infrastructure related to manufacturing including servers, software and ERP solutions. Such investments shall be used for determining eligibility under the Scheme.

10.2 The Plant, Machinery and Equipment should be purchased or leased in the name of the Participant. In cases where these are being leased, the lease should be in the nature of a financial lease within the meaning of Accounting Standard 19 – Leases or Indian Accounting Standard (lnd-AS)-116 Leases, as may be applicable to the Participant, as Notified by Ministry of Corporate Affairs or any other appropriate authority from time to time.

10.3 The Plant, Machinery and Equipment should be procured or leased through legally valid documents after payment of applicable taxes and duties.

10.4 The Plant, Machinery and Equipment of the Project approved under the Scheme shall be used in regular course for manufacturing of the Notified Product(s) that are approved in the “Letter of Approval” issued by MoT. This does not preclude the usage of such machinery for manufacturing of other goods.

10.5 Building and Civil Construction: Investment made in construction of factory building (except Administrative building and residential building) connecting road inside factory etc. shall be taken into account for calculation of investment threshold.

10.6 Participant Company can set up more than one manufacturing unit for production of Notified Products under this Scheme. They will have to declare intent in the application.

10.7 Investment in R&D and Testing Laboratory: Investment upto 10% of total project cost in R&D and Testing laboratory for development of Notified Products and maintaining quality shall be allowed and accounted for threshold investment. The software associated with R&D should have been procured or licensed through legally valid document after payment of applicable taxes and duties.

11.Associated Utilities

11.1 Use of existing associated utilities is permitted. However, investment already made in such existing utilities shall not be counted under the Scheme for threshold investment.

11.2 Fresh investment in associated utilities commensurate with the manufacturing of Notified Product(s) shall be considered as investment for determining eligibility under the Scheme.

12. Ineligible investment:

Investments in land and administrative building e.g. office and guest house building will not be covered under the Scheme.

13. Time schedule for Application for selection procedure

13.1 Application window for registration under the Scheme shall be opened for the period from 1st January, 2022 to 31st January, 2022 (inclusive) on on-line portal. No application shall be accepted after the closure of the application window. However, in case of insufficient number of eligible applications, application window for selecting new applicants will be re-opened.

13.2 The applicant, in its application, shall declare and inform the PMA/MoT regarding their Annual Investment Plan, expected Sales Turnover & expected Employment Generation and Exports during the tenure of the Scheme.

13.3 An Application shall be made through the on-line portal http://PLI.texmin.gov.in and in the format provided therein. The Applicant has to submit the Undertaking as prescribed.

13.4 A non-refundable application processing fee Rs 50,000/= shall be paid electronically by the applicant.

13.5 Upon successful submission of an application, acknowledgement with a unique Application ID number shall be communicated to the applicant over email as well as through SMS. This acknowledgement shall not be construed as approval under the Scheme. In case documents are found to be incomplete or deficient, MoT/PMA will issue query letter within 10 days from the date of online application and the applicant must submit required information/documents within 10 days from the date of receipt of such queries. In case the applicant fails to provide such information/documents in time, the application may be liable to be treated as rejected.

Table-4 Schedule for receipt of application

Opening of PLI Application window Last date for application Last date for raising query Last date for compliance
01.01.2022 31.01.2022 10 days from the date of on line submission of application 10 days from the date of receipt of queries
through email

14. Procedure for selection under the Scheme

14.1The applications will be appraised as per the provisions of the Scheme guidelines.

14.2 Selection Committee constituted by MoT for this purpose will consider applications for approval as per the criteria and budgetary limitations.

14.3 Selection of applicants will be finalized within 60 days from the date of closure of application window.

14.4 After receiving approval, MoT will issue communication with necessary details to the selected and waitlisted applicants within 5 working days from the date of finalization of the list of selected applicants.

14.5 Only the selected Participants will be issued a “Letter of Approval” as per Appendix-II and other eligible applicants will be waitlisted.

14.6 If a selected applicant is found to be ineligible at any stage, or if it has not complied with provisions of notifications, orders, guidelines or their own commitments made during application process of the Scheme, or declines the offer under the Scheme at any stage for any reason, the envisaged incentive claim of such selected applicant shall be withdrawn, and the approval issued to the applicant shall be liable to be cancelled. In such a case, the offer may be extended to the waitlisted applicants.

15 Application fee:

15.1 Applicant shall pay Rs. 50,000/- (Rupees Fifty Thousand) for registration under the Scheme.

15.2 Application fee once paid shall be non-refundable.

15.3 Fee shall be paid through NEFT/RTGS/Credit Card/Debit Cart/UPI in the head of Account of MoT. The details of Bank Account for fee payment shall be provided on the PLI portal http://PLI.texmin.gov.in.

16. Eligibility criteria and conditions for claiming incentive

16.1 Selected participants meeting the criteria of threshold investment and threshold/ incremental turnover, as prescribed, shall be eligible to claim incentive. The Application Form for disbursal of Incentives is specified on the portal http://PLI.texmin.gov.in. The participant shall also furnish all prescribed information.

16.2 In case any Participant fails to achieve threshold incremental turnover for any given year, the Participant shall not be eligible for claiming incentive for that particular financial year. However, the Participant will not be restricted from claiming incentive for subsequent years up to Performance Year 5 and for performance up to FY: 2028-29, provided prescribed and incremental turnover targets are achieved in subsequent financial years.

16.3 The incremental turnover of Notified Product(s) should be commensurate with created production capacity under the Scheme.

17 Criteria for Calculation of Incentive

17.1 The incentive shall be computed as follows:

Net Incremental Sales within cap of Notified Product(s) excluding taxes x Rate of Incentive in percentage for the Performance Year

Where,

(i) Notified Product(s) shall be as defined in this Scheme and stated in the “Letter of Approval” issued to the selected Participant.

(ii) Net Incremental Sales shall be Turnover of the Participant in the Notified Product(s) manufactured by the Participant company minus the Turnover for Notified Products of the Participant in the immediate preceding year during Scheme period.

(iii) In case of captive consumption of Notified Product(s) or sale of Notified Product (s) by the applicant to group companies, the gross turnover of Notified Product(s) shall be computed as under:

(a) Notified Products invoiced as per GST rules for sale shall only be considered for incremental turnover. In case of captive consumption of upstream products manufactured by the Participant, no incentive will be payable.

(b) In case a Participant is selling the Notified Products to a group company and also to a non-group company, sale price offered to group or non-group company, whichever is lower, shall be considered for determining total value of transaction between the related parties.

iv. Invoices generated from 1st April to 31st March of Performance Years shall be taken into account for the calculation of incentives for that Financial Year.

v. The onus of realization of sales’ proceeds through normal banking channels shall be with the Participant. Ministry of Textiles reserves the right to verify the documents evidencing realization of sale proceeds which will be counted for computing Participant’s turnover and incentives, and take suitable recovery and penal action in case of any default on realization of sale proceeds.

18. Procedure and time schedule for Disbursement of Incentives

18.1 An Application for claiming incentives complete in all respect shall be filed online by the applicant by 31st December of immediate subsequent financial year of the Performance Year. The Participant shall file its claim along with account details audited by Statutory Auditor of the Company. For example: For Performance Year 2024-2025, application for claim of incentive shall be made by 31.12.2025.

18.2 The applicant shall submit a claim for disbursement of incentive on annual basis for the sales made in a performing financial year along with its audited financial statements.

18.3 The PMA shall process claim for disbursement of incentive within 45 days from the date of receipt of such claim along with all supporting documents and will make appropriate recommendations to MoT.

18.4 Upon approval of claims by Sanctioning Authority, the disbursement of incentive shall be done by way of Direct Bank Transfer through PFMS or through any other mechanism of adjustment in the account of Participant Company only by Pay and Account Officer (PAO) within 15 days from the date of approval of the competent authority.

18.5 In case of excess claims disbursed inadvertently, the applicant shall suo-moto refund the same to MoT immediately. In case the Participant fails to refund the excess amount then he will be liable for refund along with 15% simple interest per annum to be calculated from the date of disbursement of incentive and up to actual date of refund by the Participant. The payment shall be made in the head of account of MoT. The details of Bank Account shall be provided on the PLI portal.

18.6 The company shall furnish the Output-Outcome details as per prescribed format on the PLI portal http://PLI.texmin.gov.in.

19. Project Management Agency (PMA)

The Scheme will be implemented with the assistance of a Project Management Agency (PMA) which will be responsible for providing secretarial, managerial and implementation support and carrying out responsibilities as assigned by MoT from time to time.

20. General Terms and Conditions of investment

20.1 Expenditure and Investment:

(I) Expenditure on consumables and raw material used for manufacturing shall not be considered as Investment.

(II) The date of capitalization of the investment in the audited financial statement of the selected applicant shall be considered as the date of investment under the Scheme.

(III) The heads of Investment, based on which eligibility is being determined, should be capitalized in the audited financial statement of the applicants as certified by the Statutory Auditor.

(IV) No second hand/ used/ refurbished plant, machinery, equipment, utilities shall be allowed under threshold investment.

20.2 Insurance: The Participants are advised to secure adequate insurance cover on all movable and immovable assets against natural or man-made disasters like floods, cyclones, earthquakes, tsunamis etc. MoT will not be liable to compensate for any losses in such situation.

20.3 Conformity to Quality Standards: All Notified Products manufactured by the Participants shall be in conformity with applicable regulatory norms, quality standards and guidelines issued by the concerned authorities from time to time. If Ministry of Textiles may deem necessary, it may ask for quality reports from the internationally accredited laboratories and testing centers.

21. Certifications:

21.1 During the application and claim process, PMA will rely on, inter alia, various certificates to be submitted by the Participants from Statutory Auditors, Chartered Engineers, valuer, Chartered Accountant etc. as defined under the Scheme guidelines. The cost of such certificates as stipulated and to be submitted along with the application and claim process will be borne by the Participants.

21.2 Apart from the above, any costs / expenses in respect of any professional expertise or obtaining documents / certificates / information for the purpose of appraisal or verification of an application, including but not limited to, costs of any Chartered Engineer, Chartered Accountant, Cost Accountant, Company Secretary, Lawyer, or any other professional, or due diligence through Ministry of Corporate Affairs (MCA) or equivalent or reports from CIBIL and/or Dun and Bradstreet and/or equivalent, and cost of inspections / site visit etc., shall be borne by the Participant. In case any such costs are incurred by the PMA, then the same shall be reimbursed by the Participant to the PMA along with the applicable taxes.

21.3 The Participant shall furnish the following certificate from Chartered Engineer in respect of:

i. Investment relating to plant & machinery

ii. Investment relating to Transfer of Technology Agreements.

iii. Cost of technology, Intellectual Property Rights (IPRs), patents and copyrights along with purchase agreements

iv. Investment related to associated utilities.

21.4 The Participant shall submit the following certificates from Institution of Engineers India (IEI) registered Chartered Engineer (CE):

(i) Confirming utilization of the Plant, Machinery and Equipment for manufacturing of Notified Product(s) under target segment for each financial year for which the applicant is claiming incentive under the Scheme.

(ii) Committed Investment made by the applicant- after carrying out the physical inspection of the manufacturing facilities

21.5 The selected Applicants shall be required to furnish self-certified Quarterly Review Reports (QRRs), within 30 days from the end of each quarter in the specified format provided on the PLI portal http://PLI.texmin.gov.in. Incentive claims for a particular financial year shall be considered only if all QRRs for the period have been submitted by the Applicants within the prescribed timelines.

22. Undertakings:

The Applicant/ Participant shall furnish undertakings as prescribed alongwith the application for selection as well as for claiming benefits duly signed by its authorised signatory.

23. Change in Ownership:

23.1 A Participant shall intimate the PMA of any change in the shareholding pattern during the tenure of the Scheme, after updating with the Registrar of Companies (RoC) and the resultant change in Successor-in Interest, if any shall be intimated by PMA for approval of MoT to consider disbursal of incentives.

23.2 In case of change in successor-in-interest, all Investments undertaken by the Participant shall be considered for determining eligibility of the successor-in-interest, subject to approval and compliance with any other condition stipulated by the MoT, as may be deemed appropriate. Achievement of prescribed incremental turnover after completion of benchmark investment will determine the eligibility under the Scheme for the successor company.

24 Risk Management System (RMS) and Internal Audit Mechanism

24.1 Risk Management System: A Risk Management System shall be put in place by MoT. MoT will create a team of officers for inspection of Participant companies as and when required. The teams will conduct inspection on random basis as per computer generated list of the Participants.

24.2 Recovery mechanism and penal provision:

An internal Audit mechanism shall be put in place. On scrutiny of documents under post audit mechanism, if it is found that excess claim has been made and/ or excess payments has been made to the Participant, MoT will raise demand on the Participant for the recovery. The Participant shall be liable to refund the same within 30 days from the date of receipt of the demand Notice failing which 15% simple interest per annum will be charged from date of disbursement.

If it is established at later stage that claim under the Scheme has been availed by mis-declaration or by submitting fabricated documents, Joint Secretary/Trade Advisor will adjudicate such cases after issuing Show Cause Notice to the Participant company following the Principles of Natural Justice. The Participant in such cases shall be liable for penal action and amount of penalty shall not be less than the excess payment made and may go up to 5 times of excess claim value. Other action as deemed appropriate under laws of the land will also be taken in such cases.

Penalty amount shall be deposited in the Consolidated Fund of India account. In case the penalty amount is not paid, the same shall be recovered as an arrear of land revenue through respective District Collector and Magistrate under whose jurisdiction the entity falls.

25 Appellate Authority and dispute redressal: An appeal against the order passed by Joint Secretary/Trade Advisor shall be placed before the Appellate Committee to be constituted under the Chairmanship of Secretary Textiles with Additional Secretary, Additional Secretary & Financial Adviser as members.

(Vijoy Kumar Singh)
Additional Secretary to the Government of India
Tel No. 011-23010494
Email: [email protected]

New Delhi
Dated:

Copy to:

1. All concerned Ministries / Departments of Government of India

2. All States/ Union Territories

Downloads Appendix-IA, Appendix-IB, Appendix-IC, Appendix -II, Appendix III

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