Incentive Scheme for MSMEs in Powerloom Sector

GOVERNMENT OF WEST BENGAL
Department of Micro, Small and Medium Enterprises and Textiles
4, Abanindra Nath Tagore Sarani (7th Floor), Kolkata-700016

No. 3247-MSMET Kolkata, the 20.12.2021

NOTIFICATION

The Governor is pleased to sanction the implementation of a new Incentive Scheme for the Micro, Small and Medium Enterprises in West Bengal for promoting growth and development of Powerloom sector in the following manner such enterprises in the State:

1. Short Title.

The scheme may be called Incentive Scheme for MSMEs in Powerloom Sector.

2. Object.

The object of the Scheme is to extend fiscal incentives for installation of New age shuttle-less Powerlooms by MSMEs in textile sector with a view to boost production of the improved quality fabrics and to create a sustainable ecosystem for MSMEs in textile sector which can maximize the utilization of resource, generate new employment and widen the area of operation to make the State emerge as the leader in Powerloom sector in country.

3. Commencement and Duration.

Unless specifically mentioned against the respective items of incentives sanctioned under the Scheme, it comes into effect on and from the 1st day of January, 2022 in the whole of West Bengal and shall remain in force for a period of three years ending on 31st December, 2024, if not withdrawn/ extended/ amended earlier by a Notification in the official Gazette to that effect.

4. Definitions.

Incentive Scheme for MSMEs in Powerloom Sector, unless the context otherwise requires

(i) “Approved Location” means location mentioned in the approved project.

(ii) “Approved Project” means the industrial project of a unit/ an expansion unit in the Powerloom sector which should be approved before implementation of the project in two steps – the technical part of the project should be approved before implementation of the project by the Directorate of textile under the Deptt. of Micro, Small & Medium Enterprises and textiles, Govt. of West Bengal and subsequently should be approved for its financial part by any commercial Banks/ Financial Institution (Central and State)/ Cooperative Banks/ scheduled banks approved by RBI/ RRBs financing the project.

(iii) “Central Government” means the Government of India

(iv) “Eligible Enterprise” means a micro, small or medium enterprise which has obtained Udyam Registration and subsequently been found eligible as per terms and conditions of this scheme.

(v) “Existing Industrial Enterprise” means a micro, small or medium enterprise in the textile sector which has started production before 1st January, 2022 and obtained Udyam Registration.

(vi) “New Industrial Enterprise” means a micro, small or medium enterprise in the powerloom sector which has started commercial production on or after the 1st January, 2022 and obtained Udyam Registration.

(vii) “Expansion of existing enterprise “means expansion for the same item(s) of production within its existing approved capacity or for expansion for enlarged approved capacity or for manufacture of a new item with an approved capacity.

Explanation 1: In case of expansion of an existing enterprise, the fixed capital investment made or to be made on approved project shall increase the total value of the fixed capital investment of the enterprise by not less than 25% of the net value of fixed capital investment as on 31.12.2021, having complete set of existing plant & machinery in running condition. However, in respect of the enterprises which are set up on or after 01.01.2022, such date will be the date immediately prior to the date on which the enterprise goes for expansion other condition remaining the same. Such enterprises will be eligible for subsidy under clause No.9, 10 (for separate term loan for expansion portion), 13, 16, 17, 18,19.

(viii) “Factory” means any premises including the precincts thereof:

a) Wherein ten or more workers are working or were working in any part of which a manufacturing process is being carried out with the aid of power or is ordinarily so carried on, Or

b) Wherein twenty or more workers are working or were working on any of the preceding twelve months and in any of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on but does not include a mine, subject to the operation of the Mines Act, 1952 (35 of 1952) or a railways running shed.

c) “Factory Worker” means a person employed, directly or through any agency, whether for wages or not, in any manufacturing process for cleaning any part of the machinery or equipment or premises used for manufacturing process or in any other kind of work incidental to or connected with the manufacturing process or the subject of the manufacturing process.

(ix) “Term Loan” means a loan secured from Bank or Financial Institution approving the project as per clause 4 (ii) for acquiring fixed capital assets in the form of land, building, plant and machinery, tools & implements, appliances etc.

(x) “Working Capital” means capital required for running any industrial unit and includes cash credit and / or any other short term loan actually utilized as ‘working capital’.

(xi) “Fixed Capital Investment” means investment made in plant and machinery in an approved project of the eligible unit/enterprise on or after 1st January, 2021 subject to other conditions laid down in Clause No.-7 of the scheme.

Explanation-I

The “fixed capital investment” shall be calculated as follows:-

Plant and Machinery:

It shall be calculated as follows:-

The cost of plant and machinery as found installed at the approved location includes only the cost ot Powerlooms purchased and installed as per technical specification mentioned in approved project. The cost of the following items shall be excluded while calculating the investment made in Plant & Machinery:

a. Equipments such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores.

b. Installation of Plant and Machinery.

c. Research and development equipments and pollution control equipments.

d. Power generation set and extra transformer installed by the enterprise as per the regulations of the Power utility.

e. Bank charges and service charges paid to the National Small Industries Corporations or the State Small Industries Corporation.

f. Procurement or installation of cables, wiring, bus bars, electrical control panels (not mounted on individual machines), oil circuit breakers or miniature circuit breakers which are necessarily to be used for providing electrical power to the Plant and Machinery or for safety measures.

g. Gas producer plant.

h. Transportation charges for indigenous machinery from the place of their manufacture to the site of the enterprise.

i. Charges paid for technical knowhow for erection of Plant and Machinery.

j. Such storage tanks which store raw materials and finished products only and are not linked with the manufacturing process.

k. Fire fighting equipments.

Explanation-II

Advances paid to suppliers of plant and machinery for the approved project of the eligible unit on or after 1st January, 2021 will be taken into account in calculating the total fixed capital investment.

xii) “Micro Enterprise” in the manufacturing sector means an enterprise classified as such in MSMED Act, 2006 as amended time to time.

xiii) “Small enterprise” in the manufacturing sector means an enterprise classified as such in MSMED Act, 2006 as amended time to time.

xiv) “Medium enterprise” in the manufacturing sector means an enterprise classified as such in MSMED Act, 2006 as amended time to time.

xv) “State” means state of West Bengal.

xvi) “State Financial Institution” means the West Bengal Financial Corporation.

xvii) “State Government” means the Government of West Bengal

xviii) “Enterprise” means any manufacturing project in Powerloom segment of Textiles sector including industrial cooperatives and industrial self- help groups, which has obtained Udyam Registration.

xix) “Year” means, unless otherwise specifically mentioned / stated and not repugnant to the context, the financial year commencing from the 1st April and ending on 31st March following.

5. Applicability of the Incentive Scheme for MSMEs in Powerloom Sector.

5.1 The scheme shall generally be applicable to all micro, small and medium enterprises in the powerloom sector which have started production on or after 1st day of January, 2022 and have executed a Four-party agreement between the enterprise, Tantuja, Directorate of Textiles & Financial institution .Terms and conditions as a part of this agreement will be prescribed by the Department of MSME&T, WB in due course of implementation of the scheme.

5.2 The units may be in the private sector, cooperative sector and joint sector undertaking as also companies/undertakings owned and managed by the State Government and the Industrial SHGs.

6. Non-applicability of the scheme.

Incentive Scheme for MSMEs in Powerloom Sector shall not be applicable to the enterprises:

(i) That has been registered and for which eligibility certificates have been issued / incentives have been sanctioned and/ or disbursed under the respective Incentive Scheme of the State. This will continue to be governed by the respective Incentive Scheme of the State.

(ii) That has been registered and for which eligibility certificate have been issued in terms of the respective Incentive Scheme of the State but no sanction or disbursement of incentive has been made. The claim will be governed by the respective Incentive Scheme of the State.

(iii) That has commenced production before 31.12.2021 and applied for incentive under the respective Incentive Scheme of the State within the stipulated date. The claim will be governed by the respective Incentive Scheme of the State.

7. Eligibility criteria for Incentive Scheme for MSMEs in Powerloom Sector.

7.1 Any micro, small or medium enterprise in the Powerloom sector (only shuttle less powerloom as per the specifications prescribed by the Directorate of Textiles) shall be eligible for incentives Scheme for MSMEs in Powerloom Sector MSMEs subject to the fulfillment of the conditions specified below:

i) A micro, small or medium enterprise shall commence its commercial production from 01.01.2022 to 31.12.2024 and shall submit its first incentive application to the Director of Textile, Directorate of Textile. Govt. of West Bengal within 12 (twelve) months from the date of commencement of commercial production subject to fulfillment of terms and condition as laid down in the scheme.

ii) Existing units will be eligible for incentive for expansion of the project as per clause 20 of this scheme. Explanation

(i) A micro, small or medium enterprise in Powerloom sector which will commence its production on 31.12.2024 shall submit its first incentive application in prescribed form within 30.12.2025 to the Directorate of Textile, Kolkata.

ii) The unit/enterprise shall file Udyam Registration

iii) The project will be covered by a detailed feasibility report / project prepared for the purpose and approved in terms of Sub-para 7.1 (iv).

iv) A new project/Expansion project whose technical part should be approved before its implementation by Textiles Directorate under the Department of Micro, Small & Medium Enterprises and Textiles, Government of West Bengal and subsequently financial part should be approved by any or Commercial Banks /Financial Institution (Central and State ) / Co-Operative Banks/Scheduled Banks approved by RBI/ RRBs financing the project.

In case of projects with arrangement of finance from own resources, eligibility of the enterprise shall be considered by the Directorate of Textiles according to the declaration of the enterprise regarding source of finance supported by a certificate issued by a Chartered Accountant as per Annexure-VI provided the Directorate of Textiles is satisfied about the technical specification of the machineries installed and the arrangement of such finance.

v) An eligible enterprise which has availed of incentive/ subsidy in respect of any of the items specified under any other Incentive of State Govt. shall also be eligible to get the benefits of other items only under Incentive Scheme for MSMEs in Powerloom Sector subject to fulfillment of terms and conditions of the Scheme.

vi) The enterprise will submit a ‘self- declaration’ affirming:

(a) That the enterprise will abide by the Four-party agreement between the enterprise, Tantuja, Directorate of Textiles & Financial institution as mentioned in clause 5.1

(b) That the enterprise has installed Modern/Hi-tech plant & machinery (New age shuttleless powerloom) that conform to the standard/specification mentioned in the approved project.

(d) That the unit/enterprise will conduct regular Energy Audit and ensure standard energy efficiency wherever applicable.

(e) That the enterprise will follow/maintain labour laws.

(f) That the enterprise will remain in production for at least five years from the date of commencement of commercial production.

(g) That the unit/enterprise has not defaulted in payment of any government dues /dues of Financial Institutions.

(h) That the enterprise has not misrepresented or withheld any information and not suppressed any fact/ information related to the claim submitted.

(i) That all documents like approved project report, bills/ vouchers of the plant and machinery etc. submitted by the enterprise with the claim are genuine.

(j) That the terms and conditions of Incentive Scheme for MSMEs in Powerloom Sector are binding on the enterprise.

(k) That the enterprise will not divert/ utilize the loan amount disbursed by the bank / financial institution for carrying out any activity/ project other than the implementation of the approved project.

7.2 The Enterprise will make application in prescribed Form (Form-I) to the Directorate of Textiles, before investment in plant machinery for grant of incentives under the Scheme.

8. Classification of developed areas and backward areas.

Excluding capital investment subsidy which will be governed as per clause-9, for the purpose of determination of type and quantum of incentives available under this scheme for the approved projects, according to their locations, the State has been classified into the following zones:-

Zone-A : Kolkata Municipal Corporation Area, All municipal areas of North 24- Parganas, All municipal areas of South 24-Parganas, All municipal Corporation and municipal areas of Howrah.

Zone-B : Districts of Hooghly, North 24 Parganas (excluding municipal areas and Sundarban areas), South 24 Parganas (excluding municipal areas and Sundarban areas), Howrah (excluding corporation and municipal areas), Siliguri Municipal Corporation, Municipal Corporations/ Municipal Areas of Paschim Medinipur, Purba Medinipur, Purba Bardhaman, Paschim Bardhaman and Nadia.

Zone-C : Districts of Purba Bardhaman, Paschim Bardhaman (excluding municipal corporation/ municipal areas), Purba Medinipur (excluding municipal corporation/ municipal areas), Nadia (excluding municipal corporation/ municipal areas), Malda, Jalpaiguri, Murshidabad and Darjeeling (excluding Siliguri Municipal Corporation), Kalimpong, Alipurduar.

Zone-D : Districts of Birbhum, Purulia, Bankura, PaschimMedinipur(excluding municipal corporation/ municipal areas), Uttar Dinajpur, DakshinDinajpur, Sundarban Areas of South and North 24 Parganas and Jhargram .

Zone-E : Cooch Behar District.

9. Capital Investment Subsidy.

9.1 An eligible micro or small or medium enterprise in Powerloom sector irrespective of area /zone will be entitled to Capital Investment Subsidy for its approved project @20% of fixed capital investment on Plant and machinery(new age shuttle less powerloom) as defined under clause-4(xi).

9.2 Under the Incentive Scheme for MSMEs in Powerloom Sector set up anywhere in the state with effect from 1st January, 2022 and financed by State Co-operative Banks or any other bank will be eligible to get this benefit of this scheme

9.3 Capital investment Subsidy will be released by Directorate of Textiles (DOT) to the Bank/FI in advance as per requisition placed by the bank against the invoice of the purchase order produced by the enterprise to eliminate the interest burden on the loanee. Subsidy will be debited to the loanee account only after getting satisfactory joint inspection report of DoT, FI supported by the fabric testing report produced by the particular loom by the third party engaged by Tantuja.

10. Interest Subsidy on Term Loan.

10.1 An eligible micro, small or medium enterprise in Powerloom sector will be entitled to Interest Subsidy on annual interest liability on the Term Loan borrowed from a Commercial Bank/ Cooperative Bank/ Scheduled Banks approved by RBI/ RRBs/ Financial Institution (Central and State) for implementation of the approved project as follows.

Micro & Small Enterprise-

Zone A & B – 55%of interest liability for 5 years.

Zone C, D & E- 70% of interest liability for 5 years

Explanation:

The interest subsidy admissible for an eligible micro or small enterprise in Zone – A & B area will be calculated in the following manner:-

Annual interest liability on Term Loan paid by the enterprise x 55 /100
Medium Enterprise –

Zone – B. C, D & E: – The interest subsidy will be 25% of total Term Loan interest paid by the enterprise for 5 years subject to a ceiling of Rs. 175 lakh per year.

Explanation :

The Interest Subsidy admissible for an eligible medium enterprise will be calculated in the following manner:

Annual interest liability on Term Loan paid by the enterprise x 25 /100

10.2 The interest subsidy will be payable annually subject to submission of a statement / certificate (in annexure-II) by the lending Bank /Financial Institution to substantiate that the unit has paid the due interest to the institution on the due dates and has not defaulted in payment of interest at any time during the period.

11. Waiver of Electricity Duty.

An eligible micro, small or medium enterprise in Powerloom sector for its approved project will be entitled to waiver of electricity duty (reimbursement of electricity Duty) on the electricity consumed for the manufacturing activity as follows:

Micro & Small Enterprise –

Zone A & B – 50% waiver of electricity duty on the electricity consumption for 5 years from the date of commencement of commercial production.

Zone C, D & E – 75% waiver of electricity duty on the electricity consumption for 5 years from the date of commencement of commercial production.

An eligible micro or small enterprise in Powerloom sector will be entitled waiver of electricity duty on the electricity consumed for 5 years from the date of commencement of commercial production of its approved project irrespective of location subject to a maximum of Rs.10 lakh per year.

Medium Enterprise in Powerloom sector –

Zone – B & C- 100% waiver of electricity duty on the electricity consumption for 5 years from the date of commencement of commercial production subject to a maximum of Rs.25.00 lakh per year.

Zone – D & E – 100% waiver of electricity duty on the electricity consumption for 5 years and 75% waiver from the 6Ih year up to 10th year from the date of commencement of commercial production subject to a maximum of Rs.50.00 lakh per year.

12. Power Subsidy.

An eligible micro, small or medium enterprise in Powerloom sector for its approved project will be entitled to power subsidy on the electricity consumed for the manufacturing activity as follows:

Micro, Small and Medium Enterprise

Subsidy of Re. 1.00 / Kwh for enterprises located in Zone – A & B area and Rs. 1.50/ Kwh for enterprises located in Zone – C, D & E area for five years from the date of commencement of commercial production.

The power subsidy will not exceed Rs.10 lakh per year for a micro unit, Rs.20 Lakh per year for a small enterprise and Rs.30 Lakh per year for a medium enterprise and will be payable annually.

13. Subsidy for Energy Efficiency.

13.1 An eligible micro or small enterprise in Powerloom sector for its approved project will be entitled to a reimbursement of 50% of the cost of energy audit undertaken by a certified agency. The reimbursement will be made after implementation of the recommendations.

13.2 An eligible micro or small enterprise in Powerloom sector for its approved project will be entitled to a reimbursement of 25% of the cost oi installations for energy conservation as per energy audit subject to a maximum Rs.2 lakh.

14. Subsidy on Stamp Duty and Registration Fee.

14.1 An eligible micro, small and medium enterprise in Powerloom sector will be entitled to a reimbursement of stamp duty and registration fee paid by it for the purpose of registration of documents as per clause 14.2 within the State at the following rates:- Micro & Small Enterprise :
Zone-A – 75%
Zone-B – 75%
Zone-C – 75%
Zone – D & E – 100%

Medium Enterprise in Zone – B, C, D and E : 75%

14.2 The subsidy will be admissible for the purpose of:

i. Purchase of land and/ or buildings for setting up of the approved project

And

ii. Land/building/shed taken on Lease (minimum ten years) at any government /government approved Industrial Park/ Estate for setting up of the approved project.

14.3 The amount admissible will be calculated proportionately based on the percentage of land / buildings used for setting up of the enterprise for implementation of the approved project.

15. Subsidy for State Goods and Services Tax (SGST).

An eligible micro, small and medium enterprise in Powerloom sector for its approved project will be entitled to refund of Net SGST paid to the Government of West Bengal as follows:

Zone B & C- Refund of 30% of Net SGST paid for eight years from the date of commencement of commercial production. Cumulative refund of SGST shall not exceed 75% of fixed capital investment.

Zone D & E- Refund of 50% of Net SGST paid for eight years from the date of commencement of commercial production. Cumulative refund of SGST shall not exceed 75% of fixed capital investment.

16. Subsidy for Water Conservation/ Environment Compliance.

An eligible micro or small enterprise in Powerloom sector for its approved project will be entitled to a reimbursement of 50% of expenditure incurred by it towards cost of captive sound pollution control devices subject to a maximum of Rs. 2 lakh.

17. Subsidy for Standard Quality Compliance.

An eligible micro or small enterprise in Powerloom sector shall be reimbursed 50% of the expenditure incurred subject to a maximum of Rs. 5 lakh for obtaining any certification / ISO 9000/ ISO 14000 / ISO 14001/ ISO 18000 certification from approved Institutions / Research Laboratories. Any new certificate not covered above may be honoured on case to case basis according to necessity and essentiality.

Explanation 1 : The certificate must have name & address of the certification agency, address of the site/location certified; scope of certification, certificate number, date of issue and period of validity (or date of expiry),Name and Logo & Number of the accreditation board (NABCD).

Explanation 2: An eligible micro or small enterprise has to furnish a Chartered Accountant certificate (in original) as per Annexure -V regarding details of expenditure incurred in acquiring any certification / ISO 9000/ ISO 14000/ ISO 14001/ ISO 18000 certificate (excluding Hotel and Travel expenses & surveillance charges).

18. Work Force Welfare Assistance.

18.1 An eligible micro, small or medium enterprise in Powerloom sector for its approved project will be entitled to a reimbursement of 100% in first year and 75% in the remaining years of expenditure incurred by it for paying its contribution towards Employees State Insurance (ESI) and Employees Provident Fund (EPF) if at least 50% of the employees in the enterprise are recruited from amongst the persons registered with Employment Bank of the State. The period of assistance will be as follows:-

Zone – B – 5 years.

Zone – C – 7 years.

Zone – D & E – 9 years.

18.2 The reimbursement of expenditure specified in sub-para 18.1 above will be payable annually based on minimum statutory limit subject to the condition that the enterprise has paid its contribution towards ESI and EPF on due dates.

18.3 ‘Employee’ will have the same meaning as defined under “Employees’ Provident Fund Act, 1952” and “Employees’ State Insurance Act, 1948.”

19. Subsidy for Patent Registration.

An eligible micro, small or medium enterprise in Powerloom sector for its approved proj ect will be entitled to a reimbursement of 50% of expenditure incurred by it for obtaining Patent Registration. Subsidy for Patent Registration shall not exceed Rs.5 lakh.

20. Incentive for approved expansion project of an existing unit.

An existing eligible micro, small or medium scale enterprise in Powerloom sector for its approved expansion project will be entitled for incentives under clause nos. 9,10 (for separate term loan against the expansion portion) , 13,16,17,18 and 19 subject to fulfillment of the conditions prescribed for the respective items.

21. Financial facility for working capital management.

a. Tantuja under the aegis of Micro, Small & Medium Enterprises and Textiles Department will act as the Nodal Agency for supplying yarn to the first 2000 powerlooms agreeing to enlist with it for weaving of fabric as per the specifications and will buy back their entire quantum of fabric so woven conforming to the declared specifications on first cum first served basis. Tantuja will act as credit guarantor in favour of the enterprise who will agree upon buy back agreement.

b. The state-owned spinning mills will be engaged to their maximum capacity for making and supply of yarn to Tantuja

c. Tantuja will supply yarn as on demand received from the enterprise

22. Power to amend and/or relax.

Notwithstanding anything contained in any of the provisions of Incentive Scheme for MSMEs in Powerloom Sector the

State Government may at any time-

(i) modify, vary, alter, amend or withdraw any of the provisions made here in above in this Scheme and such modifications, variations, alterations, amendments and withdrawal shall be effective from the date specified in the order so made in this behalf.

(ii) make any relaxtion in applying the provisions of this scheme but such relaxtion shall be made on merits of the approved project in each case, as the State Govt. may consider necessary and appropriate.

(iii) may issue instructions and guidelines to facilitate implementation, to remove anomalies and to clarify the interpretations of the provisions of this Scheme.

23. Grievance redressal and Interpretation.

In case of any grievances against the decision of the Directorate of Textiles, application to be made to the Principal Secretary, Depth of MSME&T, Govt. of W.B. In case of any interpretation regarding the scheme, Director of Textile shall consult the Department of MSME&T before taking any final decision.

24. Repeal and Saving.

24.1 If an enterprise falling under any of the three categories of enterprises as defined in the MSMED Act, 2006, amended from time to time graduates to a higher category or beyond the purview of the act from its original category shall only continue to avail of Non-Tax benefits of its original category for a period of three (3) years from the date of such graduation to the higher category or original eligible years which ends earlier.

24.2 In the event of GST Act 2017 being replaced by any other Act, the provision of the Scheme will apply mutatis mutandis even after the new Act comes into force.

24.3 MSME & Textiles Department in consultation with Finance Department may consider to extend Capital Incentive to more number of Power-looms based on a review of the situation within the period of operation of the Scheme

Incentive Scheme for MSMEs in Powerloom Sector is notified with concurrence of the Finance Department, vide U.O. No. Group C/2021-2022/0026 dated 08/12/2021 as approved by the State Cabinet.

By Order of the Governor

RAJESH PANDEY
Principal Secretary to the
Government of West Bengal

No. 3247-MSMET dated 20.12.2021, Source

🕒 Updated on: 09.10.2025 👁️ 295