MSME Units Specific Benefits in Punjab
Dear Businessman,
IF you are doing the business in Punjab state or planning to start any business then you should be aware for subsidy benefits or incentives provided by the Punjab state.
We are sharing herewith the key subsidy benefits or incentives provided by the Punjab State. So that you can make better subsidy planning for your business.
The Industrial Policy, 2022 as notified by the Department of Industry of Govt. of Punjab has defined the fiscal incentives available for MSME Units.
These fiscal incentives are available for New Units as well as For Expansion in Existing Units provided that expansion must be at least 25% of original investment.
The key subsidy and incentives in Punjab for MSME Units
A. Access to Finance
| Sr. No. | Nature of Incentive | Extent of Incentive |
|---|---|---|
| 1 | Investment subsidy by way of reimbursement of net SGST on intra-State sale | Reimbursement of 100% of net SGST for 7 years from the date of commercial production with a cap of 100% of FCI. |
| 2 | Capital subsidy to New Micro and Small Unit. | 50% of Fixed Capital Investment subject to ceiling of INR 50 Lakh. |
| 3 | Interest Subsidy for Border Districts, Kandi Areas and Women and SC Enterprises. | For Border Districts, Kandi Areas and Women and SC Enterprises Interest subsidy @ 5% pa subject to maximum of Rs. 5 lakh per year for 5 years. |
| 4 | Additional State Support of interest subsidy under Credit Linked Capital Subsidy Scheme (CLCSS) of Ministry of MSME, GOI | Interest subsidy of 5% subject to maximum of 5 lakh per year for a period of 5 years from the date of commercial production to such units eligible under CLCSS scheme. The companies, which have already availed the CLCSS scheme and exhausted its limit are also eligible under the same terms for taking the additional benefits given by the State under the said scheme. |
| 5 | Additional State Support of reimbursement of guarantee fee charged under Collateral Free Credit Guarantee Trust for Micro and Small enterprises (CGTMSE) Scheme | 100% of guarantee fee to be reimbursed to micro and small enterprises subject to maximum of Rs. 2 lac per year for 5 years from the date of commercial production |
| 6 | Financial assistance to MSMEs for ‘Emerge’ exchange platform set up by NSE | 25% of the cost of Public Issue expenses, subject to maximum of Rs.10 lakh for registration of National Stock Exchange once during the validity period of the Policy. |
B. Access to Infrastructure
| Sr. No. | Nature of Incentive | Extent of Incentive |
|---|---|---|
| 7 | Exemption from Electricity Duty | 100% exemption for 7 years up to 100% of FCI or 100% exemption on the power consumption corresponding to the Electric Load (KW) required for the installed capacity as recorded in the approved DPR whichever is lower, from the date of release of power connection for new units/from the date of commercial production after expansion for expansion cases. (refer Illustration as per Annexure – B) |
| 8 | Exemption/Reimbursement from Stamp Duty | 100% exemption/reimbursement from stamp duty for purchase or lease of land and building |
C. Access to Technology
| Sr. No. | Nature of Incentive | Extent of Incentive |
|---|---|---|
| 9 | Assistance for Technology Acquisition | 50% of the cost subject to maximum of Rs. 25 lakh for adopting technology from a recognized National Institute once during the validity period of the Policy. |
| 10 | Additional support to ZED scheme of GOI. | Reimbursement of 50% of expenses subject to maximum of Rs. 5 lakh incurred on plant and machinery/testing equipment for obtaining at least gold category status under ZED scheme to First 100 units during the validity Period of Policy. |
| 11 | Reimbursement of expenses incurred for Energy Audit/ Water Audit/ Safety Audit/Environment audit/steam Audit | 75% subject to maximum of Rs. 1.5 lakh each for energy/environment/steam audit /water audit and Safety Audit once during the validity period of the Policy. |
| 12 | Assistance for Environmental Compliance | 50% financial support subject to max of Rs. 25 lakh on capital cost for setting up of effluent treatment plant, installation of Water Pollution Control Devices, and installing zero liquid discharge technology once during the validity period of the Policy. |
| 13 | Exemption from Ground extraction charges for new MSME units | (a) Industry using surface water @50% of its total water requirement shall be given 25% exemption from ground water charges for 7 years from the date of commercial production. (b) The Department of Water Resources shall rationalize the ground water charges in consultation with Punjab Water Resource Development Authority. |
D. Access to Market
| Sr. No. | Nature of Incentive | Extent of Incentive |
|---|---|---|
| 14 | Reimbursement of expenses incurred for patent registration | 75% of the expenses subject to maximum 10 lakh for domestic patent and maximum 20 lakh for international patent once during the validity period of the Policy. |
| 15 | Additional Support for Performance and Credit Rating Scheme of Ministry of MSME | Reimbursement of 25% of the fee subject to maximum of 10 thousand. |
| 16 | Reimbursement of expenses incurred on quality certifications | 100% subject to maximum of Rs.10 lakh on all quality certifications including ZED certification. |
| 17 | Design Clinic Scheme | Reimbursement of the contribution of industries of Rs. 1 lac per program for design awareness program by National Institute of Design, Ahmedabad |
| 18 | Vendor Development Program | Assistance of INR 5 Cr to MSME Punjab for assisting the Industry in organizing Vendor Development Programmes, Buyer – Seller meets, Reverse Buyer- Seller meets. |
| 19 | Marketing Support | Assistance to MSME for showcasing their products at local, national and international event: (a). @50% of total rent limiting to ₹5 lakhs for participation in International Trade Fairs abroad (b). @25% of total rent limiting to ₹3 lakhs for Domestic Trade Fairs and Exhibitions. (c). Nil for Pavilion at Progressive Punjab Events and Conferences |
| 20 | Design and Brand Promotion facility | State would allow setting up of Design and Brand Promotion facility by the new manufacturing units at separate location w.r.t. manufacturing facility within the state subject to maximum FCI cap of 20% of Total Project cost which shall be added in the eligible FCI of manufacturing unit. No Separate Incentive shall be available for this Design and Brand Promotion Facility. |
| 21 | Digital marketing support | Reimbursement of 50% of the cost of on boarding on e-commerce Platform, developed by NSIC, or other similar Platform approved by State Govt/GOI, subject to maximum INR 25,000 per unit to first 1000 units during the validity period of Policy. |
| 22 | Freight Assistance to Exporting Unit | 1% of FOB value or actual freight paid from the place of Manufacture to the place of shipment, whichever is less subject to maximum of Rs 20 Lac per annum for 5 years with in the validity period of policy. |
| 23 | Annual State Awards to MSME, SC, Women and Exporters | Annual award of Rs. 1 lakh per unit for excellence in productivity, quality, export for each category of enterprise. |
Negative List of Industries
No financial incentives under this policy shall be available for following industries:
- Manufacturing/packing of all alcoholic products.
- Manufacturing of Tobacco products including Cigars, Cigarettes and Gutka.
- Brick/ Tile Kilns except Fly Ash based bricks/tiles.
- Vanaspati Ghee Mills
- Rice Shellers
Note : For Border districts and Kandi Area, only (1), (2), (3) above and Rice Shellers except Basmati Shellers shall be treated as negative list of industry. Further, for Border Zone within 30 kms of international border, only (2) above shall be treated as negative list of industry.
MSME Units Definition
All manufacturing and service industry units as defined by Ministry of MSME, Government of India from time to time. However, for the purposes of fiscal incentives, the service enterprises shall be limited to the list given below
Services enterprises
- IT and ITES
- Life Sciences
- Skill Development Centres, Incubation Centres, Accelerator
- Healthcare
- Tourism & Hospitality
- Media and Entertainment
- Logistics
- Maintenance, Repair and overhaul (MRO) in the Aviation & Defense Sector
- Industrial R&D labs, Industrial Testing Labs
- Engineering and Design Services,
- Equipment Rental and Leasing (construction and industry related)
- Equipment Maintenance and Repair
- Environment services (Sewage/ refuse disposal)
- Common Utility services like steam, air, water & STP
- Printing presses offset printing press, Flexi/Vinyl Printing, Flex printing
- Design Studio with investment more than 50 lakh on Machinery & Equipment
- Auto servicing and /or repairing units with investment more than 50 lakh on Machinery & Equipment
- Packaging activity with investment more than 50 lakh on Machinery & Equipment
Any other service enterprises notified by the State Government for inclusion in the list from time to time.
Note: For availing the eligible incentives, you may take the services of KIP.
For, more information on this you are requested to contact our KIP subsidy helpline on Mail – sales@kipfinancial.com and contact Number- +918683898080
KIP Financial Consultancy Pvt. Ltd.
DSB – 38, Red Square Market, Hisar – 125001 (HR)
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