Government Incentives for Biomass Briquettes and Pellet Business in Gujarat
Govt. Incentives for Biomass Briquettes and Pellet Business in Gujarat
Based on the “Gujarat State Biotechnology Policy for 2022-27”, a business involved in biomass briquettes and pellets would likely be eligible for a range of incentives as it falls under the category of biofuels. Biofuels are explicitly listed as a “Biotechnology Product” and are also considered a “Special Project”.
The policy offers two main packages of incentives, depending on the scale of the investment.
Package 1: For Units with Investment (GFCI) less than ₹200 Crores
If your business’s Gross Fixed Capital Investment (GFCI) is less than ₹200 crores, you would be eligible for the following incentives:
Capital Assistance:
- You can receive up to 25% of your eligible Gross Fixed Capital Investment (GFCI), with a maximum limit of ₹40 crores.
- This assistance is disbursed in 20 quarterly instalments over five years.
- This assistance covers costs related to:
- Procurement and installation of plant, machinery, and equipment.
- Building construction.
- Stamp duty and registration fees for land/office purchase or lease.
- Acquiring new technologies.
- Installation of essential utilities like Effluent Treatment Plants (ETP), Captive Solar Power Plants, and HVAC systems.
Operational Assistance:
- You are eligible for assistance of up to 15% of your annual operational expenditure, capped at ₹5 crores per year.
- This covers expenses such as:
- Power tariffs for electricity purchased from state distribution companies.
- Lease rentals for operational space.
- Costs for quality certifications and bandwidth leasing.
- Expenses for obtaining domestic and international patents.
- Costs related to participating in national or international trade fairs.
Other Key Incentives:
- Interest Subsidy on Term Loans: You can receive an interest subsidy on term loans for up to five years. The subsidy is 7% for loans up to ₹100 crores (capped at ₹7 crores annually) and an additional 3% for borrowings above ₹100 crores, with an overall cap of ₹20 crores per year.
- Employment Generation Incentive (EGI): You can claim up to 50% of an employee’s Cost to Company (CTC) for one year. The ceiling is ₹50,000 for a male employee and ₹60,000 for a female employee. This incentive is for local employees and can only be claimed once per employee’s lifetime.
- EPF Assistance: The government will reimburse the EPF contribution for new employees for five years: 100% for female employees and 75% for male employees.
- Electricity Duty: You are entitled to a 100% reimbursement of the electricity duty paid for five years.
Package 2: For Mega & Special Projects
Since biofuel projects are categorized as “Special Projects,” your business could also be eligible for this package, especially if the GFCI is ₹200 crores or more. The incentives are enhanced versions of Package 1:
- Capital Assistance: Up to 25% of GFCI, with a higher ceiling of ₹200 crores.
- Operational Assistance: Up to 15% of eligible expenditure, with a higher cap of ₹25 crores.
- Other Incentives: The incentives for Employment Generation, EPF Assistance, Interest Subsidy, and Electricity Duty are the same as in Package 1.
- Facilitation Support: Mega and Special Projects receive dedicated support, including a Specific Point of Contact (SPOC) officer and assistance with land identification and trunk infrastructure development.
Important Note:
It is important to note that an eligible unit must choose to receive incentives under either this Biotechnology Policy or the Industrial Policy of the Government of Gujarat, but not both.
Incentives in addition to Central Govt.
As per the Policy, the incentives provided under the Gujarat State Biotechnology Policy (2022-27) are in addition to any incentives a business might receive from agencies outside the Government of Gujarat, which would include the central government.
The policy document explicitly states: “Incentives under this Policy will be in addition to any incentives that the unit/ institutes might avail from any agency outside the Government of Gujarat”.
However, there is an important condition attached to this provision: the total incentive amount from all government sources combined cannot exceed a certain limit. Specifically, the policy notes: “Provided, that total incentives for every item head cannot be more than 90% of actual expenditure undertaken by that unit under that item head from all Government sources”.
This means that while you can avail both state and central government incentives simultaneously, the combined value of these incentives for any specific expense category (like capital expenditure, patent assistance, etc.) cannot be more than 90% of what your business actually spent on that item.
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