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Package of Incentives

Saturday, April 10, 2010

The State Government offers the following incentives to the industrial units being set up in Haryana:

Incentives for Mega Projects in Backward Areas:
(i) Mega project with investment of Rs. 100 crore and above or any project employing more than 500 persons irrespective of investment to be set up in backward areas would be extended the facility of financial assistance to be quantified at, 50% of the tax paid on the sale of goods produced by such industrial units, under the Haryana Value Added Tax Act, 2003 for a period of 7 years from the date of start of commercial production, as Interest Free Loan (IFL) repayable after a period of 5 years from the date of grant of IFL.

(ii) Exemption from LADT for a period of 5 years.

Incentives for SSI in Backward Areas:
New SSI units in the backward areas would be extended the facility of financial assistance in the shape of Interest Free Loan to be quantified at, 50% of the tax paid on the sale of goods produced in such industrial units, under the Haryana Value Added Tax Act 2003 for a period of 5 years from the date of start of commercial production to be repayable after a period of 5 years.

Incentives for Exporting Units:
In order to boost the exports and enhance competitiveness of exporting units, subsidy up to 1% of the FOB value of exports subject to maximum of Rs. 10.00 lac per annum shall be given.

Incentives for Food Processing Industries:
(i) Food Processing Industries except wheat & rice will be considered as seasonal industry and exempted from payment of minimum demand charges for electricity during closure period of more than 3 months.

(ii) No market fee shall be levied on agriculture and horticulture produce used as raw material by Food Processing Industries with in the State except rice, wheat, mustard oil and cotton.

(iii) Interest Free Loan at the rate of 75% of the tax paid on the sale of goods produced in such industrial units shall be given under the Haryana Value Added Tax Act 2003 for a period of 5 years from the date of start of commercial production. This would be repayable after a period of 5 years.

(iv) Charges for change of land use for food processing units shall be levied @50% of normal rates in state declared backward areas.

(v) Wines/liquors/Brandy etc. made from 100% fruits produced in the State will be exempted from the Excise Duty in backward areas.

Special priority shall be given for release of electric connection to mega projects, 100% EOUs, IT Industries and FDI projects.

Exemption for payment of electricity duty:
All new industrial units except those in the negative list of industries are exempted from payment of electricity duty for a period of 5 years throughout the State.

Customised Package:
Customised package of incentives is provided for prestigious projects having an investment of Rs. 30.00 crore and above.

Preferential allotment of land:
The State Government shall give preferential treatment for allotment of land to the IT industries on an ongoing basis in all industrial estates developed by State agencies.

Continuous uninterrupted power supply:
The State Government shall endeavour to provide continuous and uninterrupted power supply for IT industries and shall exempt them from scheduled power cuts.

Exemption from Electricity Duty:
Exemption from Electricity Duty to the new industrial units for a period of 5 years from the date of release of electric connection except those included in the negative list of industry.

Floor Area Regularion (FAR):
Relaxation in FAR/Maximum Height of the building permitted for IT units as per following:

a) Maximum permissible floor area ratio (in %)

General Industry - 125, IT Industry - 250

b) Maximum height of the industrial building (in metres)

General Industry - 21, IT Industry - 30, Cyber Park - 60

Registrations and Stamp Duty:
Rebate on registration and transfer of property charges and exemption from stamp duty on a tapering scale shall be given for sale/lease of built-up space to the IT Industry establishing facilities in private STPs/Govt. STPs/IT Parks.

Exemption from LADT:
Local Area Development Tax (LADT) exempted for importers of goods of IT industry.

IT as priority sector for lending:
IT Hardware (except those having electro plating heat treatment and painting processes)/ Software/IT Enabled industry exempted from the purview of the Haryana Pollution Control Act, provided that where the number of workers in such industries exceed 300 and there exists no sewerage facilities, no exemption shall be available.

In the Public Sector, HSIIDC or the State Government holds 51% to 100% of the equity share capital, in the joint sector the investment of Corporation and co-promoters is 26% and 25% respectively and remaining 49% comes from public participation. In assisted sector the Corporation's investment is limited to 15% of equity. HSIIDC associates in promotion of the projects identified by private promoters in the assisted sector under the Memorandum of Understanding Scheme. As a promotional organisation, HSIIDC extends its full support to the co-promoters in implementing the projects expeditiously with all technical, managerial and financial skills available with it. The Scheme envisages disinvestment of HSIIDC's shareholding after a period of three years from the date of commercial production or five years from the date of first disbursement, whichever is earlier or as per the terms of Financial Collaboration Agreement. The shareholding is bought back by the private promoters under the buy back arrangement provided in the agreement & promoters executed between HSIIDC.


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