We all know Uttarakhand as a beauty state famous for its magnanimous Himalayas, holy rivers, stunning landscapes, ancient stone work mesmerizing flora and fauna. Few of us know that it is one of the fastest growing states in India and a major destination for investments and manufacturing, tourism and infrastructure industry. Within short of its existence Uttrakhand has developed its industrial infrastructure including Integrated Industrial Estates, sector parks and well developed industrial estates. Its Government has introduced numerous policies to enhance the ease of doing business in the state.
Following sectors have been marked by the State Government as focus sectors: Automobile, Biotechnology, Film, Food Processing, IT/ITES, Medical & Aromatic Sector, Horticulture & Floriculture, Natural Fibres, Pharmaceuticals, Renewable energy, Tourism and Wellness & Ayush.
Tax incentive available for businesses :
Policies of the State Government
Uttarakhand Startup Policy: This policy offers 100% refund of SGST after adjustment of applicable ITC upon supply of material by concerned firm for consumption (B2C) within the state upon meeting of certain conditions.
Uttarakhand MSME Policy: It offers reimbursement of 100% SGST to entities engaged in eligible activities after adjustment of ITC of sale of finished products (B2C) for initial 5 years and 90% or 75% thereafter depending upon the areas category till March 31st 2025.
Uttarakhand Tourism Policy:Under this policy entities engaged in tourism activity with a capital investment up to INR 10 cr get 100% SGST reimbursement for initial 5 years and 75-90% thereafter depending upon area category till 31st March 2025. In the case of large entities (10-75 cr) there is a 30% SGST reimbursement. For Mega (75-200 cr) and ultra mega (more than 200 cr) entities there is 50% SGST reimbursement after adjustment of ITC on sale of finished product (B2C).
In addition to incentives provided by the State Government Central Government also offers incentives. Central Government offers 100% GST reimbursement up to the extent of the central share of CGST and IGST to all new industrial units in manufacturing sector and services sector subject to Annexure-1 of NEIDS providing list of ineligible industries.
In addition to the above there are other incentive available under Uttarakhand MSME Policy which is valid upto March 31st 2023. Some of the incentives are interest subsidy up to 10%, capital subsidy upto 40%, transport subsidy up to 7%, stamp duty concession up to 100%, power bill rebate up to 100%, reimbursement on internet usage charges upto 50% and up to 100% exemption on Mandi charges. These incentives are available depending upon area where the unit is located and the size of the unit.
Uttrakhand provides a wide range of incentives to different sectors with sector-specific policies. The State Government provides investors single window clearance platform with one stop destination for the required approvals. The state has transparent tax policies and has fast approval mechanism for the projects. Industrial land in Uttarakhand is available at a low cost which makes it an attractive destination for new businesses.
Are you planning to start a new business in Uttarakhand ?
The author is a practicing Chartered Accountant, Senior Partner in Kohli Chitkara & Co. LLP and can be contacted at [email protected] Any comments or queries are welcome.
Disclaimer: The information provided in this article is for general informational purposes only. All efforts have been made to provide accurate information in this document, however it should not be perceived as a professional or legal advice. Reader should consult a professional before making any decision based upon this document. Under no circumstance author or the publisher shall have any liability to you for any loss or damage of any kind incurred as a result of the use of this information.