Subsidy On Silo Projects In UP
Govt. Grants/Incentives/Subsidy for Warehousing Godown and Silo Projects in UP
Uttar Pradesh Warehousing and Logistic Policy, 2022
Warehousing and Silo Investors,
The investor who are going to plan investment in Warehousing sector in UP then he should consider the provision of subsidy as provided by the UP Govt in their Warehousing and Logistic Policy, 2022.
We have framed the key parameters of Subsidy and related aspects thereof in the interest of readers, which are as:
Uttar Pradesh Warehousing and Logistic Policy, 2022
1. “Storage facilities” as defined in said Policy as–
a. Warehouses including go-downs both open/ closed developed for handling and storage of cargo in bulk/ break bulk form.
b. Silos built as vertical storage structures for storing bulk cargo in both solid and liquid form.
b. Silos built as vertical storage structures for storing bulk cargo in both solid and liquid form.
2. Subsidy for Silo Project: –
Silo Project are covered under the storage facility hence eligible to take incentives as per said policy and there are two types of subsidies i.e Front End Subsidy and Back End Subsidy.
3. Subsidy Pattern:
Front End Subsidy: The Front-end subsidies include exemptions/ concession which shall be allowed to the eligible projects as defined in this policy before commencement of commercial operations. Projects need to be registered with Nodal Agency and obtained Unique ID.
Back End Subsidy: Back-end subsidy shall be provided after completion of project and commencement of commercial production. Projects need to be obtained Letter of comfort (LoC) for this.
Back End Subsidy: Back-end subsidy shall be provided after completion of project and commencement of commercial production. Projects need to be obtained Letter of comfort (LoC) for this.
4. Eligible Criteria for Capital subsidy:
(i) Warehouse including go-downs developed over minimum area of 1 lakh Sq. ft and minimum Capital Investment of INR 20 Crores.
(ii) Silo developed over minimum area of 4-acres and minimum Capital Investment of INR 30 Crores.
(ii) Silo developed over minimum area of 4-acres and minimum Capital Investment of INR 30 Crores.
5. Eligible Capital Investment:
Capital Investment Includes the following cost as:
(i) Land: The Actual Purchase price as per registered documents excluding stamp duty and registration fee subject to maximum of 40% of Total Capital Investment.
(ii) Building: Only cost of construction of new building shall be taken not acquisition of old building and repair expenditure incurred thereon.
(iii) Other Construction: Such as Compound wall, internal road etc.
(iv) Equipment: Includes cost of Equipment, Inhouse Vehicle, Electrification etc.
(i) Land: The Actual Purchase price as per registered documents excluding stamp duty and registration fee subject to maximum of 40% of Total Capital Investment.
(ii) Building: Only cost of construction of new building shall be taken not acquisition of old building and repair expenditure incurred thereon.
(iii) Other Construction: Such as Compound wall, internal road etc.
(iv) Equipment: Includes cost of Equipment, Inhouse Vehicle, Electrification etc.
Note: Working Capital shall not be part of Capital Investment.
Further Project should be operationalization within 3 Years from the Effective period of policy.
In case, Capital Investment has been initiated prior to the Effective Date then at least 80% of Capital Investment should have been made after Effective Date during the eligible investment period and the same Capital Investment will be considered as the Eligible Capital Investment for determining admissible total incentives
However, in case, investment in land is made prior to the Effective date, such investment in land shall not be eligible for any incentives but valuation of such land on book value shall be considered for determining the eligibility of the projects.
6. Fiscal Incentives: :
(i) Front end subsidies:
| Sl | Head | Incentive |
|---|---|---|
| 1 | Stamp Duty exemption | Exemption of Stamp duty on land purchased or taken on lease (for a period of at least 10years) shall be provided at following rates: • 100% in Bundelkhand and Poorvanchal region and region covered under ‘Taj Trapezium Zone’ • 75% exemption in Madhyanchal and Paschimanchal (except Gautambuddha Nagar & Ghaziabad) • 50% exemption in Gautambuddha Nagar & Ghaziabad The Exemption shall be provided on submission of Bank Guarantee of equivalent amount of the exemption to Stamp & Registration Department, which shall be released on commencement of commercial operations within the admissible period. |
| 2 | Concession on Land use conversion charges | 75% of Land Use conversion charges shall be waived off The Concession shall be provided on submission of Bank Guarantee of equivalent amount of the concession to the relevant State Authority/ Agency, which shall be released on commencement of commercial operations within the admissible period. |
| 3 | Exemption in Development Charges | 75% of the development Charges shall be exempted The Exemption shall be provided on submission of Bank Guarantee of equivalent amount of the exemption to the relevant State Authority/ Agency, which shall be released on commencement of commercial operations within the admissible period. |
| 4. | Ground Coverage | Such standalone storage facilities will be allowed Ground Coverage upto 60% |
Note: The exemptions/ concession as per above shall be provided by the relevant department only on verification of the unique ID issued by the Nodal Agency and will communicate the details to the Nodal Agency.
(ii) Back end subsidies:
| Sl | Project | Incentive |
|---|---|---|
| 1 | Capital Subsidy | Capital Subsidy to Warehouses/ Silos/ Cold Chain Facility shall be provided at the rate of 15% of Eligible Capital Investment subject to- • maximum INR 5 crores for setting up such facilities anywhere in the State; • maximum INR 10 Crores for setting up such facilities in the designated Logistics Zones (As per Para 8.4) Note: To be paid one time post commencement of commercial operations |
| 2 | Electricity Duty Exemption | Exemption of Electricity Duty shall be provided at the rate of 100% for a period of 10years |
| 3 | Quality Certification cost reimbursement | Quality Certification cost reimbursement shall be provided at the rate of 50% of cost paid upto maximum INR 5 lakh per project Note: To be paid one time post commencement of commercial Operations |
| 4. | Skill Development Subsidy | Skill Development subsidy shall be provided as reimbursement of stipend @INR1000 per trainee per month for 6months up to maximum 50trainees per annum for 5years per project |
Note:
1) Sum of all benefits including exemptions provided to any project shall not exceed 100% of eligible capital investment as defined under the policy.
2) Towards this, the reimbursements shall be done to any project post commencement of commercial operations and evaluation of exemptions availed by the applicant against the unique ids issued by the Nodal Agency (if any)
3) Projects benefited under this policy will be eligible to get admissible benefits of Govt. of India’s Plan Agriculture Infrastructure fund.
1) Sum of all benefits including exemptions provided to any project shall not exceed 100% of eligible capital investment as defined under the policy.
2) Towards this, the reimbursements shall be done to any project post commencement of commercial operations and evaluation of exemptions availed by the applicant against the unique ids issued by the Nodal Agency (if any)
3) Projects benefited under this policy will be eligible to get admissible benefits of Govt. of India’s Plan Agriculture Infrastructure fund.
7. Application Filling Process:
1) The designated Nodal Agency, i.e. UPSIDA shall administer the implementation of the policy through Online Incentive Management System (OIMS). It will perform the following –
a. Coordinate with relevant State Authorities/ Agencies for the facilitation of front-end benefits defined under the policy
b. Track the status of applicants who have been issued the ‘Unique Id’,br> c. Review & process the applications for ‘back-end subsidies’ as per the Policy
2) The Nodal Agency shall appoint a dedicated Nodal Officer for coordinating the review and examination of the back-end incentive applications and facilitation of front-end benefits provided in the policy.
3) All applications of any kind of incentives (both front end and back-end subsidies) as defined under the policy shall be submitted to the designated Nodal Agency i.e. UPSIDA for issuance of a ‘Unique Id’. The designated Nodal Officer at UPSIDA shall pursue the following –
a. Scrutinize the applications for its completeness and relevancy
b. Scrutinize the applications for its errors, inconsistency or irrelevancy,br> c. Communicate any discrepancy or incompleteness in the application and raise query to seek response on such matters from the applicant
d. Issue a ‘Unique Id’ to each complete and relevant application for further incentive management The applicant will be able to avail the front-end subsidies (exemptions/ concession) as per this Policy. The relevant State deptt/ agency will provide the benefit to the applicant only on verification of the Unique Id.
4) A Scrutiny Committee at CEO UPSIDA level shall be set up. Relevant departments and agencies shall be invited to the committee for reviewing the incentive application as per requirement.
5) The Nodal Agency will process and after necessary evaluation at the Scrutiny Committee will put up the applications before the Empowered Committee (EC) or High-level Empowered Committee (HLEC) as the case may be for sanction of ‘Letter of Comfort’ or disbursal of incentives.
a. Coordinate with relevant State Authorities/ Agencies for the facilitation of front-end benefits defined under the policy
b. Track the status of applicants who have been issued the ‘Unique Id’,br> c. Review & process the applications for ‘back-end subsidies’ as per the Policy
2) The Nodal Agency shall appoint a dedicated Nodal Officer for coordinating the review and examination of the back-end incentive applications and facilitation of front-end benefits provided in the policy.
3) All applications of any kind of incentives (both front end and back-end subsidies) as defined under the policy shall be submitted to the designated Nodal Agency i.e. UPSIDA for issuance of a ‘Unique Id’. The designated Nodal Officer at UPSIDA shall pursue the following –
a. Scrutinize the applications for its completeness and relevancy
b. Scrutinize the applications for its errors, inconsistency or irrelevancy,br> c. Communicate any discrepancy or incompleteness in the application and raise query to seek response on such matters from the applicant
d. Issue a ‘Unique Id’ to each complete and relevant application for further incentive management The applicant will be able to avail the front-end subsidies (exemptions/ concession) as per this Policy. The relevant State deptt/ agency will provide the benefit to the applicant only on verification of the Unique Id.
4) A Scrutiny Committee at CEO UPSIDA level shall be set up. Relevant departments and agencies shall be invited to the committee for reviewing the incentive application as per requirement.
5) The Nodal Agency will process and after necessary evaluation at the Scrutiny Committee will put up the applications before the Empowered Committee (EC) or High-level Empowered Committee (HLEC) as the case may be for sanction of ‘Letter of Comfort’ or disbursal of incentives.
Special note: Readers are advised to read the policy carefully and accordingly take the investment decision. We at KIP, shall not be liable for any financial or non-financial loss/damages occurred if any.
We at KIP, working as Warehouse business subsidy consultant and if you want to proceed any warehousing and silo project in Haryana, Punjab and UP then you can take our consultancy services.
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