[ 159 ]

GOVERNMENT OF PUDUCHERRY

CHIEF SECRETARIAT

DEPARTMENT OF INDUSTRIAL DEVELOPMENT

(INDUSTRIES AND COMMERCE)

(G. O. Ms. No. 2/2012-Ind-A. dated 7th May 2012)

NOTIFICATION

Whereas, the Department of Industrial Development (Industries

and Commerce) issued notifications and its amendments from time

to time vide (i) G.O. Ms. No.19/2001-Ind., d a t e d 2 7 - 3 - 2 0 0 2,

(ii) G.O. Ms. No. 6/2004-Ind., dated 2-8-2004, (iii) G.O. Ms.

No. 18/2006-Ind., dated 24-1-2007, (iv) G.O Ms. No. 11/2002-Ind.,

dated 6-11-2002, (v) G.O. Ms. No. 7/2004-Ind., dated 2-8-2004,

(vi) G.O. Ms. No. 1/2008- Ind.A, dated 21-5-2008, (vii) G.O Ms.

No. 4/2003-Ind, dated 3-4-2003, (viii) G.O.Ms. No. 8/2004-Ind,

dated 2-8-2004, (ix) G.O Ms. No. 9/2005-Ind-A, dated 29-6-2005

and (x) G.O Ms. No. 1/2007-Ind.A, dated 19-4-2007;

Registered with the Registrar

of Newspapers for India under

No. M. 8270

Registered No.

TN/PMG(CCR)/42/2012-14

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Dated : 14-5-2012

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14 {

No. 24 Poudouchéry

Lundi

Mai

2012

No.

Puducherry

Monday

14th

May

2012

(24 Vaisakha 1934)

LA GAZETTE DE L'ETAT

[PART–II

160

And whereas, up to 10th Five Year Plan, the schemes viz.,

(i) Motivation of Scheduled caste/Scheduled tribe/Women Entrepreneurs

to start industries; (ii) The Scheme for Accelerating the Growth of IT

Industries (SAGII) in Puducherry; and (iii) The Pondicherry Capital

Investment Subsidy Scheme for Thrust Area Industries 2003, were

implemented as separate schemes;

And whereas, during the 11th Five Year Plan, in the Annual

Plan 2007-08, abovesaid incentive schemes were amalgamated under

single scheme as "Motivation of Entrepreneurs to Start Industries

and Fiscal Assistance to Industries " and funds were provided under

single head of account. And therefore, there arose a need to issue

of a fresh Government Order amalgamating all the existing schemes;

And whereas, the proposal of the Department of Industries for

amalgamating and modifying all the incentive schemes has been

considered and the same has been accepted by the Government;

Now, therefore, the Lieutenant-Governor of Puducherry is pleased

to approve the amalgamation and modification of all the said schemes

by superseding all the Government Orders as stated above save as

respects things done or omitted to be done before such supersession,

into one scheme called "Motivation of Entrepreneurs to Start Industries

and Fiscal Assistance to Industries", namely:-

1. Short title, extent and commencement.— (i) This scheme

shall be called as "Motivation of Entrepreneurs to Start Industries

and Fiscal Assistance to Industries".

(ii) This scheme shall be in operation in the whole of the

Union territory of Puducherry.

(iii) It shall come into force at once.

2. Definitions.—

(a) Expansion/Diversification/Modernization : 'Expansion,

diversification and modernisation' means such expansion/

diversification or modernization that must result in at least 25%

increase in plant and machinery in value and must also result

in at least 25% increase in production capacity.

(b) Investment on building : 'Investment on building' means,

the value assessed by Public Works Department/Pondicherry

Industrial Promotion Development and Investment Corporation

(PIPDIC). Buildings which have already been occupied and used,

subsequently purchased by the entrepreneurs for setting up of

the industry are not eligible for subsidy.

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value as per land document (Sale Deed) or the guideline register

value of the Government whichever is less.

(d) Plant and machinery : The plant and machinery and

electrification costs (including transformer costs, control panel

and costs of industrial wiring), testing equipment, tools, jigs

and moulds shall be admitted to investment subsidy.

3. Subsidies.—

I. CAPITAL INVESTMENT SUBSIDY :

Eligibility.— This scheme shall be applicable to the following

categories:

(i) SC/ST/Women entrepreneurs :

Scheduled caste/scheduled tribe/women entrepreneurs shall

be eligible for subsidy for the investments made on land,

building, plant and machinery @ 25% thereof subject

to a maximum of ` 25.00 lakhs for the small and micro

manufacturing enterprises which started production on or

after 27-3-2002. The scheduled caste and scheduled tribe

entrepreneurs shall be eligible for subsidy at the rate of 25%

on the land, building and plant and machinery subject

to a cumulative maximum of ` 50 lakhs for the investment

made on or after 24-8-2011, provided the unit commences

production/completes expansion as the case may be on or

after 24-8-2011.

(ii) Information Technology (IT)/Information Technology

Enabled Services (ITES) Industries :

New IT/ITES industrial units which started production

on or after 6-11-2002, shall be eligible for subsidy on the

investments made on plant and machinery @ 20% thereon

subject to a maximum of ` 20.00 lakhs for the large, medium,

small and micro enterprises during the period of operation

of the scheme.

(iii) Thrust area industries :

(a) The following have been identified as thrust area

industries:-

(i) Electronic industries

(ii) Bio-technology industries

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162

(iii) Food processing industries

(iv) Agro processing industries including marine products

(v) Leather products and footwear industries

(vi) Light engineering industries including auto components.

(vii) Textiles industries including garments.

(b) New thrust area industries which have started

production on or after 3-4-2003, shall be eligible for subsidy

on the investments made on plant and machinery @ 20%

thereon subject to a maximum of ` 20 lakhs for the large

and medium enterprises and 35% subject to a maximum of

` 30 lakhs for the small and micro enterprises during the

period of operation of the scheme.

(iv) 5% additional capital investment subsidy to

Karaikal region :

(a) In order to achieve balanced growth in all regions,

it is proposed to offer 5% additional incentive on the

existing subsidy schemes to the units in Karaikal region

(30% subject to a limit of ` 30 lakhs in case of SC/ST/

women entrepreneurs, 25% subject to a limit of ` 25 lakhs

for IT industries). The small and micro thrust area enterprises

will be granted 40% subject to a limit of ` 35 lakhs and

medium and large thrust area enterprises will be granted

25% subject to a maximum of ` 25 lakhs. This additional

subsidy will be applicable for the investment made on or

after the date of issue of this Government Order.

(b) The priority industries which will be announced by

Government and set up in Karaikal district shall be eligible

for subsidy at the rate of 25% on fixed asset viz., land,

building and plant and machinery subject to a maximum of

` 40 lakhs.

Note: Existing units of above categories except IT/ITES

industries, undertaking expansion, diversification and

modernization shall also be eligible for subsidy for the

investments on eligible assets during the period of operation

of the scheme. Existing unit means an industrial unit,

which has commenced production before date mentioned

in the respective above category.

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(v) Physically handicapped persons/Ex-servicemen :

(a) New industrial units which started production on

or after 5-8-2009 by physically handicapped entrepreneurs

and Ex-servicemen for the investments made on land, building

and plant and machinery are eligible for capital investment

subsidy at the rate of 25% thereon subject to a maximum

of ` 25 lakhs for the micro and small manufacturing enterprises.

(b) The subsidy for physically handicapped (PH) persons

will be admissible only for those who suffer from not less

than 40% incapacity under relevant category.

II. RENT SUBSIDY :

(a) Scheduled caste/scheduled tribe or woman entrepreneur,

who has started production on or after 27-3-2002 in a rented

building, is eligible for rent subsidy for the period of first

five years from the date of commencement of commercial

production on a tapering basis as below; subject to a ceiling

of ` 5,000 per month on the following conditions:-

(i)

for the first two years

. .

50% of the rent;

(ii)

for the third year

. .

40% of the rent;

(iii)

for the fourth and fifth year . .

25% of the rent.

Provided that in the case of industrial units accommodated

in sheds or premises owned by Government departments

including local bodies or Government undertakings or Government

sponsored societies, the rent fixed by such organisation will

be taken into account for calculating the subsidy. Provided

further that, in the case of industries accommodated in the

sheds or premises owned by private individuals or bodies,

the rent actually charged or the rent as fixed by Public

Works Department, whichever is less, will be taken into account

for calculating the subsidy.

(b) Rent subsidy claims will be entertained and granted

only in respect of units in operation. Rent subsidy claims

should be accompanied by payment of receipts for electricity

charges and receipts of sales tax returns for the previous

year, apart from rent payment receipts.

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164

III. INTEREST SUBSIDY :

(a) The industrial units which have availed loan from

financial institutions towards creation of fixed assets and

for working capital shall be eligible for an interest incentive

to an extent of 25% of the annual interest amount paid, for

five years which shall be admissible from the date of

commencement of commercial production.

(b) The maximum amount of interest incentive admissible

to each industry shall not exceed ` 75,000 in any financial year.

or any other Government Corporation, Scheduled Banks including

Co-operative Banks and Government sponsored Co-operative

Societies.

(d) The claim should be accompanied by 'No Due Certificate

of Interest' issued by the financial institution/bank etc.

(e) The incentive will be paid through the financial institution.

(f) The interest subsidy is eligible for the industries set

up by SC/ST/Women entrepreneurs and for thrust area industries

and IT sector.

(g) The interest subsidy is eligible for the industries which

have commenced production on or after 2-8-2004.

(h) The industry set up by SC/ST/Women/PH/Ex-servicemen

entrepreneurs and thrust area industries and IT sector by

availing loan on or after 24-8-2011 and commenced production

on or after 24-8-2011 are eligible for 25% interest subsidy

subject to a maximum of ` 5 lakhs per annum for a period

of 5 years.

IV. INFRASTRUCTURE SUBSIDY :

(a) 25% subsidy subject to a maximum of ` 1 crore will be

granted on the investment made on building with a minimum

extent of ` 50,000 sq. ft. constructed area, by the infrastructure

developers for leasing out to IT industries (Manufacturers

of Computer Systems, Software/Information Technology Enabled

Services (ITES), Business Process Outsourcing (BPO) and

Knowledge Process Outsourcing (KPO). This subsidy is also

admissible to the industrial units, which are investing for

construction of factory building of not less than 50,000 sq.ft

for setting up of the above IT industries.

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(b) 25% subsidy subject to a maximum of ` 1 crore will be

granted on the investment made on building with a minimum

extent of 50,000 sq. ft. constructed area by the infrastructure

developers for leasing out to the bio-technology industries.

investment made on building with a minimum extent of

5,000 sq. ft by bio-technology industries unit for self-occupation.

(d) The building value shall be assessed by PIPDIC/Public

Works Department.

(e) The infrastructure subsidy would be eligible for the

investment made on building on or after 31-7-2006.

(f) The infrastructure subsidy shall be disbursed in annual

installment not exceeding ` 25 lakhs per annum till completion

of the total eligible subsidy.

V. GENERATOR SUBSIDY :

The micro, small and medium industrial units (manufacturing

and service sector) shall be eligible for the grant of 50%

subsidy with a cap of ` 5 lakhs per industrial unit on the

investment made on or after 5-3-2009 on generator sets.

VI. EMPLOYMENT INCENTIVE :

(a) Wage/Employment subsidy of 20% wage/salary up to a

maximum of ` 5 lakhs per annum, in case of such workers

who are covered under Provident Fund (PF) (if applicable)

will be granted. The new units which commence the production

on or after 2-8-2004 would alone be eligible for this incentive

for a period of 5 years from the date of commencement of

production. Wage/Salary would be limited by the minimum

wages prescribed by Government from time to time. The categories

for which minimum wages are not prescribed by Government

are not eligible for incentive.

(b) Wage/Employment subsidy would be available only if

the units provide direct employment to at least 10 persons.

Wage/Employment subsidy will be considered after verification

of the previous years records by the Directorate of Industries.

provides at least 60% of the employment to the people of

Union territory of Puducherry.

LA GAZETTE DE L'ETAT

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166

4. Procedure for claiming subsidy :

(i) The industrial unit should register the claim in the

prescribed form available with the Directorate of Industries

and Commerce prior to taking effective steps for setting up of

new unit/undertaking expansion, diversification and modernisation.

The application for the grant of incentive/subsidy shall be

submitted to the Directorate of Industries and Commerce in

the prescribed form after commencement of production and

obtaining Entrepreneurs Memorandum Part-II/permanent

registration/commencement of production certificate.

The industrial units shall apply for investment subsidy

within one year from the date of issue of entrepreneurs memorandum

(Part-II) /date of issue of commencement of commercial production

certificate in the case of new units and within one year of

completion of expansion/diversification/modernization in case

of existing unit.

(ii) State Level Committee will go into the merits of each

case for the grant of capital investment subsidy and

infrastructure subsidy and to decide whether the industrial

unit qualifies for the grant of incentive/subsidy and will also

determine the quantum of incentive/subsidy admissible to

the unit. The State Level Committee is authorised to sanction

incentive/ subsidy not exceeding the level prescribed in the

scheme.

The composition of the State Level Committee shall be as under:

(1) The Secretary to Government

. . Chairman

(Industries and Commerce).

(2) The Managing Director, PIPDIC

. . Member

(3) The Director, IT Department,

. . Member

Puducherry.

(4) The Deputy Secretary/Under

. . Member

Secretary (Finance).

(5) Head of the IT/Electronics Department,

. . Member

Pondicherry Engineering College.

(6) The Director of Agriculture,

. . Member

Puducherry.

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(7) Head of Bio-technology Department,

. . Member

Pondicherry University.

(8) The Director of Industries and

. . Member-

Commerce, Puducherry.

Secretary.

The State Level Committee has powers to condone the delay

in claiming registration/filing of application for the grant of

subsidy for a period of three years from the date of issue of

initial permanent registration/entrepreneur memorandum Part-II.

(iii) The application for the subsidy viz., rent subsidy, interest

subsidy, employment incentives and generator subsidy will be

processed by the Industries Department for obtaining sanction.

These cases need not be placed before the said State Level

Committee.

5. General conditions :

(1) (i) Second hand imported machinery shall be eligible for

investment subsidy provided the machinery is imported by the

unit directly or through agent and the claim is supported with

required import documents, (ii) In case of indigenous second

hand machinery the initial purchase value with depreciation or

the second hand purchase value or value assessed by the

Chartered Engineer whichever is less will be taken as investment.

(iii) An affidavit that subsidy has not been availed of from

Central Government or any State or Union Territories shall be

furnished for these items of plant and machinery, (iv) The

second hand machinery is not eligible for subsidy in case of

IT/ITES industry.

(2) In case of subsidy under SC/ST/Women/PH/Ex-servicemen

category, the investments in respect of industrial units fully

owned by the respective category and women entrepreneurs

will alone be considered. In case of partnership and private

limited companies, all the partners, share holders and board of

directors shall belong to the respective category as the case

may be. The amount of subsidies and incentives availed under

such case shall be refunded fully with interest in case the new

partners or share holders or board of directors not belonging

to the respective category as the case may be are included in

the business within five years from the date of availing of the subsidy.

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168

(3) It is mandatory that the entrepreneurs shall inform Industries

Department about their expansion/diversification/modernisation

well in advance with project report and obtain claim registration

prior to expansion/diversification/modernization programme.

(4) The following investments shall not be eligible for investment

subsidy:-

(i)

Working capital

(ii)

Commissioning fee

(iii)

Goodwill fees

(iv)

Royalty

(v)

Preliminary and pre-operative expenses.

(vi)

Capitalised interest

(vii)

Technical know-how fees

(viii)

Transportation and erection charges

(ix)

Goods vehicles

(x)

Office equipment, furniture, grates, pallets and consumable

stores, etc.

(xi)

Rice mills (Excluded from the grant of capital investment

subsidy as similar schemes, viz., Technology Upgradation/ Establishment/

Modernization of Food Processing Industries, implemented by the

Ministry of Food Processing, Government of India). The applications

received from the rice mills on or after the date of issue of this

Government Order are not eligible for subsidy.

(5) All claims in this regard shall be supported by a certificate

issued by the Chartered Accountant and certificate from the

financial institution if loan is obtained by the unit.

(6) The subsidy amount shall be disbursed through the financial

institutions/banks only, if the unit is financed by them, towards

the adjustment against the loan availed by the entrepreneurs or

for the creation of additional fixed assets or for the working

capital purposes. In case of self-financed units, the subsidy

shall be disbursed directly to the entrepreneurs.

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(7) The capital investment subsidy shall be disbursed in a

single installment, where due to paucity of funds in a particular

financial year or for such other reasons as the case may be,

single installment disbursement is not possible, such disbursement

will be made in installments. The infrastructure subsidy shall

be disbursed in annual installments not exceeding ` 25 lakhs

per annum till completion of the total eligible subsidy.

(8) The beneficiary shall execute an agreement in the prescribed

format with the Directorate of Industries and Commerce.

(9) A unit which has availed investment subsidy from

Central Government or any other agency shall not be eligible

to apply for subsidy for same investment again under this scheme.

If two or more industrial undertakings are set up by the same

person as proprietor, common partners, common board of directors/

share holders, such units are eligible for subsidy as separate

entity provided the location, products and licences/clearances/

registrations are obtained separately.

(10) The industrial unit shall not transfer or dispose of the

plant and machinery in any manner till the completion of

5 years (period of agreement) from the date of agreement.

(11) The industrial unit shall have to furnish the details of

production, employment and other information every year and

from time to time as sought by the Industries Department.

(12) The unit availing the subsidy shall have to recruit

local persons to the extent of a minimum of 60% of the total

strength. The percentage of the above-mentioned employment

will have to be maintained by the industrial unit during the

period of the agreement.

(13) The decisions of the State Level Committee shall be

final in deciding the eligible amount of capital investment subsidy

and infrastructure subsidy. In case of any doubt/ambiguity the

decision/interpretations of the State Level Committee is final

and binding on all concerned. The decision of the Secretary

to Government (Industries and Commerce) is final in all other

incentives, viz., (i) Rent subsidy to SC/ST/Women entrepreneurs,

(ii) Interest subsidy, (iii) Employment subsidy and (iv) Subsidy

for generators.

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(14) Investment subsidy to the industrial units is liable to be

refunded by the units with interest @ 14% per annum on issue of

registered demand notice to the units by the Director of Industries

and Commerce on grounds of obtaining subsidy by misrepresentation,

forgery, deception or if the unit is not found working for 5 years

from the date of receipt of subsidy or for violation of conditions of

agreement. All amounts due to the Government under this provision

shall, in case of default, be recoverable as arrears of land revenue

under the provisions of the Revenue Recovery Act. Sufficient opportunity

to show cause shall however be granted to the units before

a demand is raised against it.

(15) The Government is empowered to withdraw all/part of the

above-mentioned incentives/subsidies without assigning any reason.

(16) The form of application in respect of the said scheme will

be prescribed by the Directorate of Industries and Commerce.

(By order of the Lieutenant-Governor)

P. RAJALAKSHMI,

Under Secretary to Government (Ind. & Com.).

————

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