Name of the Scheme Scheme for financial assistance by way of Capital Subsidy and Credit linked Interest Subsidy to Micro, Small and Medium Enterprises.

GR No : Govt. of Gujarat, Industry & Mines Dept, Resolution No: SSI/102020/332278/CH

Date : 01/09/2020

Operative Period: From 07/08/2020 to 06/08/2025

Who will be eligible?

1) The Enterprise registered as an industrial unit under MSME Development act, 2006 with respective DIC as manufacturing enterprise.

2) For setting up new enterprise during operative period of the scheme such enterprise has to commence production during the operative period.

3) For carrying out expansion by existing enterprise with investment in fixed capital more than 50% of its existing gross fixed capital investment as on date of initiation of expansion. However, such investment should be minimum 60% only in plant and machinery. Such expansion should have been completed and it should commence production during the operative period.

4) Forward Integration, Backward Integration and Diversification is also allowed Old & second hand machinery will not be eligible for assistance.

Assistance Available

iii. Capital Subsidy

1) Manufacturing sector

A Quantum of capital Investment Subsidy

Category I Taluka @25% of Term loan amount subject to a maximum amount of Rs. 35 lakhs; if Eligible FCI is over Rs. 10 crores, additional Rs. 10 lakh will be given

Category II Taluka @20% of Term loan amount subject to a maximum amount of Rs. 30 lakhs; if Eligible FCI is over Rs. 10 crores, additional Rs. 7.5 lakh will be given

Category III Taluka and Municipal Corp. areas @10% of Term loan amount subject to a maximum amount of Rs. 10 lakhs; if Eligible FCI is over Rs. 10 crores, additional Rs. 5 lakh will be given

B Quantum of Interest Subsidy

Category I Taluka Interest subsidy @7% on term loan with the maximum amount of Rs. 35 lakhs per annum for a period of 7 years

Category II Taluka Interest subsidy @6% on term loan with the maximum amount of Rs. 30 lakhs per annum for a period of 6 years

Category III Taluka and Municipal Corp. areas Interest subsidy @5% on term loan with the maximum amount of Rs. 25 lakhs per annum for a period of 5 years

  • 1% additional interest subsidy to differently abled entrepreneur, women entrepreneur and registered start up in manufacturing sectors.
  • 1% additional interest subsidy to young entrepreneur below age of 35 years on the date of sanction of term loan.
  • Maximum rate of interest subsidy to an enterprise will not be more than 9%, 8%, 7% where the rate of interest subsidy is 7%, 6%, 5% respectively. However, eligible entreprise shall have to bear minimum 2% interest levied on term loan by bank/ FI.
  • An existing enterprise which installs solar power plant or any other renewable power plant for captive consumption in the premises will be eligible for interest subsidy in accordance to the location of the enterprise. In addition to Interest subsidy as mentioned above special provision is made for the interest subvention on such installation. However, incentive will be available only once.

2) Service sector

Only new MSME of service sector will be eligible for interest subsidy on the term loan on new machinery, equipment and furniture/ fixture (except land and building)

Category I Taluka Interest subsidy @7% on term loan with the maximum amount of Rs. 35 lakhs per annum for a period of 7 years

Category II Taluka Interest subsidy @6% on term loan with the maximum amount of Rs. 30 lakhs per annum for a period of 6 years

Category III Taluka and Municipal Corp. areas Interest subsidy @5% on term loan with the maximum amount of Rs. 25 lakhs per annum for a period of 5 years

o 1% additional interest subsidy to registered start up in service sector and having Udhyam registration as MSME

  • Service Enterprise which has service tax registration are only eligible for incetive.
  • The enterprise shall have to obtain shop and establishment registration from Muncipal corporation for doing business, if enterprise is located in the area of municipal corporation.

iv. Conditions:

  • Enterprise shall opt for date of interest subsidy either from the date of first disbursement of loan or from the date of commencement of commercial production / rending services.
  • Enterprise shall have to apply at online portal within one year from the date of first disbursement of loan, or on or before the date of commencement of commercial production/rendering services whichever is later.
  • Late submission of application will be considered by deducting late period after maximum permissible time for application. The period of late submission will be counted from the accepted date of option (i.e date of first disbursement of loan or from the date of first disbursement of loan or from the date of commencement of commercial production/rendering services)
  • Reimbursement of interest subsidy will be made only after commencement of commercial production/rendering services of the enterprise.
  • The enterprise will not be eligible for interest subsidy under this scheme if, term loan is sanctioned after one year from the date of commencement of commercial production/rendering services.
  • If the enterprise becomes defaulter in payment of interest or instalment of term loan to Bank/Financial institution as per guidelines of RBI and as mentioned in certificate of Bank/Financial institutions such default period will be deducted
  • Interest subsidy will not be available for penal interest or any other bank charges.
  • If enterprise is availing interest subsidy under scheme of Central government then total quantum of interest subsidy from State and Central, in any case shall not exceed the total interest paid to Bank/Financial institution.
  • The eligible enterprise shall have to bear minimum 2% interest levied on term loan by Bank/Financial institution.

i. Conditions applicable to Capital Investment subsidy and Interest subsidy (Scheme 1 & 2)

a)

b) Only new building, new plant machinery/ equipment and second hand imported machinery will be eligible for incentive COs.

c) Enterprise shall have to furnish information regarding production, sales, turnover, and employment etc. annually to concerned DIC before end of September each year.

d) Enterprise will have to observe pollution control measures as prescribed GPCB or other competent authority.

e) The enterprise shall have to obtain shop and establishment registration from Municipal corporation for doing business for service enterprises, if enterprise is located in the area of Municipal Corporation.

f) Enterprise will have to employ at least 85% of the total employment and 60% of supervisory and managerial staff from local persons.

g) Enterprise will have to remain in production for 7 years from the date of commercial production and if it fails to continue production for 7 years, the amount of capital investment subsidy disbursed will be recovered as arrears of land revenue.

h) If an enterprise is located in the geographical limit of more than one taluka, then the taluka in which the enterprise has the largest percentage of land area will be considered as the eligible category.

i) Out of Forward Integration, Backward Integration, Diversification and Expansion, only one activity will be eligible for subsidy during the policy period.

j) Existing or New enterprise carrying out an activity of Forward Integration, Backward Integration and Diversification with an investment more than 25% (out of which minimum 60% investment should be in Plant & machinery) of GFCI will be eligible.

ii. Scheme-3 Assistance for Quality Certification

The scheme is to extend support to MSME to get quality certification to introduce quality product in competitive market. The manufacturing sector will be eligible for following assistance.

iii. ERP Assistance

65% of the capital cost for installing the Enterprise Resource Planning (ERP) system subject to a maximum amount of Rs.1,00,000/-

i. ERP system with server and software facilitating details of production, inventory control, sales, purchase, accounting and Human Resource Management etc.

ii. The Capital cost in ERP system includes installation charges, software and annual service cost. The Capital cost does not include the hardware part of the ERP system.

iii. In case of Software-as-a-service (SaaS) based deployment option of ERP system, the annual subscription charges will be considered.

Scheme -4 Financial support to MSMEs in ZED Certification.

The scheme envisages promotion to Zero Defect and Zero Effect (ZED) manufacturing amongs MSMEs and ZED Assessments for their certification to as to:

a. Develop a Ecosystem for Zero Defect Manufacturing in MSMEs.

b. Promote adaption of Quality tools/systems and Energy Efficient manufacturing.

c. Enable MSMEs for manufacturing of quality products.

d. Encourage MSMEs to and constantly upgrade their quality standards in products and processes.

e. Drive manufacturing with adoption of Zero Defect production processes and without impacting the environment.

f. Support ‘Make in India’ campaign.

g. Develop profession in the area of ZED manufacturing and certification.

The enterprise will be eligible for subsidy @ 50% of all charges on the amount after deducting the assistance received from Government of India for ZED Certification, up to a maximum amount of Rs.50000.

Scheme-6: Assistance for Technology Acquisition

a) Assistance for acquisition of appropriate technology from recognized institution for its product/process during the operative period of the scheme will be provided by way of 65% of the cost payable subject to a maximum of Rs.50 Lakh, including royalty payment for first two years.

b) The enterprise shall have to obtain prior approval of MSME Commisionerate within one year signing of MOU/agreement/contract with technology provider.

c) Assistance will be available to New Enterprise as well as exixting enterprise for acquiring technology.

d) Assistance will not be eligible for purchase of any plant and machinery or equipment.

e) Patented Technology acquired from Indian Companies/foreign companies will also be eligible.

Scheme-7 Assistance for Patent Registration

a) Individual any legal entity will be eligible for assistance under the scheme.

b) 75% of cost/expenditure incurred for any number of patent applications subject to maximum Rs.25lakh per application/Enterprise for obtaining Patient registration of developed product/process during policy period.

c) Fees paid to patent attorney, patent service center, patent registration and patent equipment purchased to develop patent will be eligible as cost/expenditure (excluding travel, hotel charges) for obtaining patent registration.

d) Maximum fee for attorney for national patent shall be capped at Rs.50000 for domestic patents and Rs.2,00,000 per country for international patent within the overall cap of 75% of the cost/expenditure of patent registration within overall ceiling.

e) 50% of the Assistance will be disbursed after the publication/notification of the patent.

f) Applicant shall have to submit application within one year from the date of publication notification of the patent. Application submitted after one year from the date of publication/notification will not be eligible for assistance.

Scheme-8 Assistance for saving in consumption of Energy and Water

The existing as well as new enterprise taking action for saving in consumption of Energy and Water will be eligible for assistance under this scheme.

a. 75% cost of energy/water audit conducted by a recognized institution/ consultant subject to maximum Rs.50,000/- for each will be reimbursed once during the operative period of the scheme.

b. 25% of cost of equipment recommended by the Auditing authority subject to maximum Rs.20 lakhs one time assistance will be eligible during the operative period of the scheme.

c. The assistance on cost of equipment will be eligible subject to the condition that saving in energy/water minimum by 10% of average monthly consumption of previous 12months before audit.

d. Even after taking all steps as mentioned above for efficient use of energy/water, if consumption is increasing with to increase in production then such claim will be examined separately by the committee to be constituted by SLEC.

Scheme-9 Assistance for raising Capital through SME Exchange

a. Under the new guideline of SEBI, MSME can raise equity capital through SME Exchange.

b. To encourage MSME to opt for this route, assistance will be provided under this scheme.

c. 25% expenditure incurred on raising of funds through SME Exchange maximum to Rs.5 lakhs one time after successful raising equity as per approve scheme by SME exchange during the operative period of the scheme.

d. Enterprise shall have to apply within 1 year from the listing date of listing in SME exchange.

e. GVFL may take equity in enterprise which are register with SME exchange.

Scheme-10 Assistance for reimbursement of CGTMSE fees.

a. Government of India has introduced instructions to financial institutions to sanction collateral free loan upto Rs 2 crores by charging additional fee on such loans.

b. It has been decided to extent support to MSME under this scheme service fees charged by bank/financial institution as under will be eligible for assistance.

c. Annual service fees: 1st year- 1.8% + Risk premium. 2nd Year onwards- 0.85% or as amended by CGTMSE (Credit guarantee fund trust for micro and small enterprises) Trust/RBI from time to time.

d. Assistance as reimbursement @100% annual service fees paid to bank/financial institutions by entrepreneur for availing of collateral free term loan under CGTMSE, for the period of 5 years.

Scheme-11 Rehabilitation of sick enterprises.

a. MSME sick industrial enterprises satisfying the criteria of sick enterprise as per RBI guidelines will apply to MSE commissioner rate for sick enterprise registration.

b. MSME commissioner will scrutinise the application on the basis of the balance sheets.

c. After scrutiny of the applications, sick enterprise registration will be issued.

d. This registration issued by MSME commissioner shall only indicate that the enterprise is sick as per RBI guideline and does not qualify for any assistance or OTS from State Government. However the sick enterprise may be assisted by institutions as per their prevailing policy.

e. For preparing the diagnostic report from expert/expert agency and expenditure thereof will be reimbursed @50% cost of preparations of draft rehabilitation scheme as assistance subject to maximum of rupees 1 Lakh to sick enterprise.

Scheme-12 Assistance for power concession charges.

Eligibility:

MSME, located in other than GIDC/Approve industrial park area which has paid charges to distribution licensee, during the operative period of the scheme, for new connection or to getting additional load in case of existing consumer (in case of expansion) or shifting of connection or service line will be eligible for assistance under the scheme.

Quantum of assistance:

Assistance @ 35% of charges paid to distribution licenses for LT/HT service line, maximum limit upto Rs 5 lakhs.

Conditions:

The enterprise shall have to apply for reimbursement within 1 year from the date of payment of charges to distribution licensee for service line.

Scheme-13 Assistance in Rent to MSMEs.

The enterprise rented/leased shared to set up manufacturing activity will be provided assistance by way of reimbursement of rent paid by it. During the operative period this will extend support to add working capital as this will result into saving of margin payable to bank and financial institutes.

Quantum of assistance

The assistance @ 65% of Rent paid by the enterprise with maximum limit of Rs 1 Lakh pa. The assistance will be provided for 5 years.

Eligibility

Any MSME in manufacturing activity which has acquired rented/leased shared will be eligible to get assistance.

You can reach to author at 9870148084 or [email protected] or www.subsidyandloan.com

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