Amit Mundhra, FCA, ISA(ICAI)

SALIENT FEATURES OF RAJASTHAN INVESTMENT PROMOTION SCHEME – 2014 (RIPS – 2014)

1. Applicability of the Scheme

a. New and existing enterprises making investment for setting up new units;

b. Existing enterprise making investment for expansion; and

c. Sick enterprise making investment for its revival

d. Scheme Shall not be applicable to an enterprise if its commercial production or operation has commenced before the issuance of this order or an entitlement certificate is issued under any previous scheme.

2. Benefits to Manufacturing Enterprises

a. Investment subsidy of 30% if VAT and CST which have become due and have been deposited by the enterprise, for 7 years.

b. Employment generation subsidy upto 20% of VAT and CST which have become due and have been deposited by enterprise, for 7 years.

c. Exemption from payment of 50% of electricity duty for 7 years, provided that for enterprises engaged in tourism sector, it shall be restricted to 25% of the electricity duty.

d. Exemption from payment of 50% of land tax for 7 years.

e. Exemption from payment of 50% of Mandi Fee for 7 years.

f. Exemption from payment of 50% of Stamp Duty on purchase or lease of land and construction or improvement on such land; and

g. Exemption from payment of 50% of conversion charges payble for change of land use.

3. Benefits to Services Enterprises

a. Reimbursement of 50% of amount of VAT paid on purchase of plant and machinery or equipment for a period upto seven years from the date of issuance of the entitlement certificate, provided that for enterprises engaged in providing entertainment, the reimbursement shall be restricted to 25% of such amount of VAT paid.

b. Exemption from payment of 50% of Entertainment Tax for 7 years.

c. Exemption from payment of 50% of Electricity Duty for 7 years, provided that for enterprises engaged in providing entertainment, it shall be restricted to 25% of the Electricity Duty.

d. Exemption from payment of 50% of land tax for 7 years.

e. Exemption from payment of 50% of Stamp Duty on purchase or lease of land and construction or improvement on such land; and

f. Exemption from payment of 50% of conversion charges payble for change of land use.

4. Special provisions for Women, Scheduled Castes, Scheduled Tribes and persons with Disability enterprise

a. Such manufacturing enterprise shall get additional investment subsidy to the extent of 10% of VAT and CST which have become due and have been deposited by the enterprise.

b. Such Service Enterprise shall get additional 10% reimbursement of VAT paid on plant and machinery and equipment for a period upto seven years from the date of issuance of entitlement certificate for this purpose.

5. Benefits to Enterprise in Backward and Most Backward Area

a. All eligible enterprise, except cement manufacturing enterprise, set in backward and most backward areas shall get all the benefits of scheme however the period of the scheme except for interest subsidy shall be extended to 10 years.

b. For Manufacturing Enterprises, additional investment subsidy of 20% of VAT and CST which have become due and have been deposited by the enterprise for a period of 7 years.

c. For Service Enterprise, additional 10% reimbursement of VAT paid for backward area and additional 20% reimbursement of VAT paid for most backward area, on plant and machinery and equipment for a period upto seven years from the date of issuance of entitlement certificate for this purpose.

Benefits to Manufacturing Sector in Thrust Sectors

Manufacturing enterprises in the sectors mentioned hereunder shall be allowed benefits in addition to the benefits related to tax exemptions available to all enterprises.

Ceramic and Glass Sector

  1. Investment subsidy of 50% of VAT and CST which have become due and have been deposited by the enterprise for 10 years.
  2. Employment generation subsidy upto 10% of VAT and CST which have become due and have been deposited by the enterprise for 10 years.
  3. For enterprises making minimum investment of Rs. 50 lakhs rupees in a ceramic hub as notified by Industries Department, the quantum of investment subsidy will be 65% of VAT and CST.

Dairy Sector

For Enterprise making minimum investment of Rs. 25 crore ‘

  1. Investment subsidy of 50% of VAT and CST which have become due and have been deposited by the enterprise for 10 years.
  2. Employment generation subsidy upto 10% of VAT and CST which have become due and have been deposited by the enterprise for 10 years.
  3. 50% exemption from payment of Entry Tax on Capital goods, for setting up of plant for new unit or for expansion of existing enterprise or for revival of sick industrial enterprise.

ESDM Sector [Electronic System Design and Manufacturing]

For enterprises making minimum investment of Rs. 25 Lakhs

  1. Investment subsidy of 75% for first 4 years, 60% for next 3 years and 50% for the last 3 years of VAT and CST which have become due and have been deposited by the enterprise.
  2. Employment generation subsidy upto 10% of VAT and CST which have become due and have been deposited by the enterprise.
  3. 50% exemption from payment of Entry Tax on capital goods for setting up of plant for new unit, or for expansion of existing enterprise or for revival of sick industrial enterprise.

Industrial Gases Sector

For Enterprises making minimum investment of Rs. 50 Crore

  1. Investment subsidy of 60% of VAT and CST which have become due and have been deposited by the enterprise, for 7 years; and
  2. Employment generation subsidy upto 10% of VAT and CST which have become due and have been deposited by the enterprise, for 7 years.

MSME Sector

Manufacturing enterprises in the MSME Sector, following additional benefits are available.

  1. For micro and small enterprises in rural areas, 75% exemption from payment of electricity duty.
  2. Reduced CST of 1% against C Form, on sale of goods for a period of 10 years, for micro and small enterprises.
  3. 50% exemption from payment of Entry Tax on raw and processing materials and packaging materials excluding fuel.
  4. Reduced stamp duty of Rs. 100/- per document in case of loan agreements and deposit of title deed and lease contract and Rs. 500/- per document in case of simple mortgage with or without transfer of possession of property executed for taking loan for setting up of micro small or medium enterprises or enhancing credit facilities or transfer of loan account from one bank to another.

Pharmaceutical Sector

For Enterprises making minimum investment of Rs. 50 Crore and providing a minimum employment of 200 persons

  1. Investment subsidy of 50% of VAT and CST which have become due and have been deposited by the enterprise, for 7 years; and
  2. Employment generation subsidy upto 10% of VAT and CST which have become due and have been deposited by the enterprises for 7 years
  3. 50% exemption from payment of Entry Tax on capital goods for setting up of plant for new unit, or for expansion of existing enterprise or for revival of sick industrial enterprise.

Plastic to Oil manufacturing Sector

For enterprise making minimum investment of Rs. 1 Crore

  1. Investment subsidy of 60% of VAT and CST which have become due and have been deposited by the enterprise, for 10 years; and
  2. Employment generation subsidy upto 10% of VAT and CST which have become due and have been deposited by the enterprises for 10 years
  3. 50% exemption from payment of Entry Tax on capital goods for setting up of plant for new unit, or for expansion of existing enterprise or for revival of sick industrial enterprise.

Tourism Sector

  1. Investment subsidy of 50% of VAT and CST which have become due and have been deposited by the enterprise, for 7 years; and
  2. Employment generation subsidy upto 10% of VAT and CST which have become due and have been deposited by the enterprises for 7 years
  3. Reimbursement of 25% of amount of VAT paid on purchase of plant and machinery or equipment for a period upto 7 years from the date of issuance of the entitlement certificate.
  4. Exemption from payment of 50% of entertainment tax for 7 years,
  5. Exemption from payment of 100% of luxury tax for 7 years,
  6. Land allotment in urban and rural areas at DLC rates.
  7. 25% additional exemption from payment of stamp duty chargeable on the instrument of purchase or lease of more than 100 years old heritage property in the state.
  8. 50% additional exemption from payment of conversion charges for heritage property converted into heritage hotel.

Amit Mundha, FCA

(Author is a member of The Institute of Chartered Accountants of India and he can be reached at amit.mundhra@gmail.com)

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