New Central Sector Scheme for Industrial Development
F. No. 1(1)/2020-SSS.—The Government of India is pleased to announce New Central Sector Scheme for Industrial Development of Union Territory of Jammu & Kashmir.
- Scheme Title: This Scheme will be called New Central Sector Scheme for Industrial Development of Jammu & Kashmir.
- Coverage: The Scheme will cover the Union Territory of Jammu & Kashmir.
- Commencement and Duration of the Scheme: It will be effective from 01.04.2021 and will remain in force up to and inclusive of 31.03.2037.
- Application period for registration: Registration shall commence from 01.04.2021 and will continue till 30.09.2024, subject to the guidelines issued in this regard. Notwithstanding the aforementioned time period, if based upon the registrations already granted, the projected financial liability reaches 115 percent of the Approved Funds, registration process may be paused, either temporarily or permanently. However, registration process may be resumed depending on availability of Approved Funds.
4.1. Merely submitting application for registration will not entitle any applicant for registration under this scheme. Further details shall be provided in the guidelines of this scheme.
4.2. No unit will have the right to register under this scheme or claim the benefits unless it is specifically approved by the registering authority as laid out in the guidelines.
4.3. The registration will be granted by the registering authority as laid out in the guidelines, which will, inter-alia, consider the prima-facie eligibility of the unit, availability of Approved funds.
4.4. All units willing to avail incentive(s) under this scheme have to apply for registration through the online portal. - Grant of registration: All applications for registration shall be disposed of by 31.03.2025 unless otherwise extended.
- Definitions:
6.1. Approved Funds mean financial outlay allocated under each component of this scheme.
6.2. Arm‟s length price as defined under the provisions of Income Tax Act, 1961.
6.3. Commencement of Commercial Production: means starting of manufacturing of finished goods on commercial basis which is preceded by trial production and installation of complete plant and machinery for manufacturing of finished products in commercial quantity and all raw materials, consumables, etc. required for manufacture are available.
6.4. Commencement of Commercial Operation: means starting of operation/delivering of services on commercial basis.
6.5. Existing Unit means a unit which has commenced commercial production/operation prior to1.4.2021 and is registered under GST in the UT of Jammu & Kashmir.
6.6. Finished Goods means the goods actually produced and supplied by an industrial unit and for which it is registered under the Scheme.
6.7. Manufacturing unit means a unit which carries out processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term ―manufacturing unit‖ shall be construed accordingly.
6.8. New Unit
(a) For manufacturing sector means a unit registered under this scheme on or after 1.4.2021 but not later than 31.03.2025. Such unit has to commence commercial production within 3 years from the date of grant of registration.
(b) For Service sector means a unit registered under this scheme on or after 1.4.2021 but not later than 31.03.2025. Such unit has to commence commercial operation within 3 years from the date of grant of registration.
(c) A new unit will be required to fulfill the following conditions:
(i) It is not formed by splitting up, or reconstruction of a business already in existence.
(ii) It is not formed by transfer to the new unit of plant or machinery previously used for any other purpose.
(iii) It has not relocated from elsewhere and/or is not an existing unit reopened under a new name and style.
Provided that heritage property not in use before 1.4.2021 is restored
thereafter for commercial or hospitality or tourism services on commercial basis will also be considered as new unit as per eligibility conditions to be further elaborated in detailed guidelines.
6.9. Plant and Machinery in case of Manufacturing units shall cover industrial plant and machinery as erected at site which are newly purchased from open market at an arm‘s length price. It excludes relocated/recycled/refurbished plant and machinery.
6.10. Building and other durable physical assets in case of Service sector units shall cover new building and other durable physical assets for a service sector unit where purchases have been made following an Arm‘s length pricing
6.11. Raw material means materials or substances used by any unit, in the production or manufacturing of the finished goods.
6.12. Services means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.
6.13. Service unit means a unit providing “services”.
6.14. Substantial expansion means an additional investment of minimum twenty-five percent of the total amount of investment already made in an existing unit in plant and machinery (for manufacturing sector), or construction of building and other durable physical assets (for service sector).
The additional investment should result in increase of production capacity/enhancement of Services or diversification and should not be a mere replacement of existing plant and machinery.
6.15. Unit means any industrial (manufacturing) entity or eligible service sector enterprise other than those run departmentally by Government, which is a registered business enterprise under Goods & Service Tax.
6.16. Working Capital is difference between Current Assets and Current Liabilities. It is the capital required for the smooth and uninterrupted functioning of the unit and is used to finance its day to day needs, such as buying raw materials.
6.17. Zone A and Zone B for the purposes of this scheme shall mean areas as defined by Government of Jammu & Kashmir and as specified in the guidelines. - Eligibility for availing incentives:
7.1. All units eligible under Manufacturing and eligible Service sector will be granted incentive(s) under this scheme as defined under respective incentives.
7.2. The scheme shall not be applicable to the units which manufacture the products listed in he negative list at Annexure –I.
7.3. Service sector units with a minimum investment of Rs.1 crore in building and other durable physical assets will be eligible for incentives under this scheme. The scheme shall be applicable only for services listed in positive list in Annexure-II which may be modified further by the Steering Committee.
7.4. All eligible units have to commence commercial production/operation within 3 years from the date of grant of registration.
7.5. Any investment made on or after 1.4.2019 by a unit in plant and machinery (for manufacturing sector) or construction of building and other durable physical assets (for service sector) will be taken into consideration to decide the eligible value of investment as per the entitlement under Capital Investment Incentive, Capital Interest subvention and GST Linked Incentive of this scheme. However, the date of commencement of commercial production/ operation has to be on or after 1.4.2021. The eligibility for availing any incentive is subject to grant of registration under the scheme.
7.6. (a) Cost of Plant and Machinery (in manufacturing sector) that is essential for manufacturing of finished goods but excludes cost of land, consumables, disposables or any other item charged to revenue.
(b) Cost of construction of Building and procurement of other durable physical assets for the service sector unit that are basic to the running of that particular unit in service sector but excludes cost of land, consumables, disposables or any other item charged to revenue.
7.7. Units availing benefits under other schemes of the Government of India will not be eligible for similar incentives under this Scheme.
7.8. Subject to provisions of Clause 7.7, such units can avail other incentive(s) under the Scheme as per eligibility. Details regarding this shall be specified in the guidelines.
7.9. The beneficiary of this scheme has to furnish an undertaking to abide by the terms and conditions of the scheme.
7.10. Eligibility under this scheme will be subject to verification on investment (Core and Non-Core) in Plant and Machinery (in manufacturing sector)and cost of construction of building and other durable physical assets (in service sector). However, the incentive will
be eligible only for core segment in both manufacturing and service sector. Details will be laid down in the guidelines.
7.11. Period for availing incentive(s):
All eligible units can avail specified incentive under this scheme up to a period as specified in the respective incentives. - Nodal agency
The Jammu &Kashmir Development Finance Corporation Ltd. (JKDFC) or any other agency authorized in this regard by Government of India will be the nodal agency for disbursal of incentives under various components of the scheme. Nodal agency will release incentive only
through e-transfer to the designated bank accounts of eligible units.
