West Bengal Incentive Scheme 2013 for Micro, Small and Medium Enterprises
Micro, Small and Medium Enterprises, Incentive Scheme
GOVERNMENT OF WEST BENGAL
Department of Micro and Small Scale Enterprises and Textiles
No. 59-MSET(III)/155-07/2011 Dated the 3rd February, 2014
NOTIFICATION
The Governor is pleased to sanction the implementation of a new Incentive Scheme for Micro, Small & Medium Enterprises in West Bengal in the following manner with an eye to promoting growth and development of such enterprises in the State.
1. Short Title:
The Scheme may be called the West Bengal Incentive Scheme 2013 for Micro, Small and Medium Enterprises (hereinafter referred to as WBIS 2013 for MSMEs)
2. Object:
The object of the Scheme is to extend fiscal incentives to encourage entrepreneurs to set up Micro, Small and Medium Enterprises with a view to focusing on development of MSMEs in the backward region of the State and creating a sustainable ecosystem in the MSME sector which can maximize the utilization of resource and widen the area of operation to make the State emerge as the MSME leader in the country.
3. Commencement and Duration:
Unless specifically mentioned against the respective items of incentives sanctioned under the WBIS 2013 for MSMEs, it comes into effect on and from the 1st day of April, 2013 in the whole of West Bengal and shall remain in force for a period of five years ending on 31st March 2018, if not withdrawn/ amended earlier by a Notification in the official Gazette to that effect.
4. Definitions:
In the WBIS 2013 for MSMEs, 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 in the manufacturing sector for which Eligibility-cum-Registration certificate has been issued under WBIS-2013 for MSMEs. Such projects should be approved before implementation of the projects by any Directorate under the Deptt. of Micro & Small Scale Enterprises & Textiles, Govt. of West Bengal or concerned DIC or Micro, Small & Medium Enterprises Development Institute (MSMEDI), Govt. of India or Food Processing Industries & Horticulture Deptt., Govt. of West Bengal or 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) “DIC” means the District Industries Centre, which also includes the Sub-DIC, Durgapur/Siliguri.
(v) “Eligible Unit/Enterprise” means a micro, small or medium enterprise which has filed Entrepreneurs Memorandum (Part-II) and subsequently been found eligible as per terms and conditions of WBIS-2013 for MSMEs.
(vi) “Existing Industrial Unit” means a micro, small or medium enterprise which has started production before 1st April,2013 and filed EM (Part-II).
(vii) “New Industrial Unit” means a micro, small or medium enterprise in the manufacturing sector which has started production on or after the 1st April,2013 and filed EM(Part-II). If an existing industrial unit sets up a branch as second/ third unit etc. in different location in the State and manufactures new items, its second/ third unit etc. will only be treated as a new industrial unit provided EM(Part-II) is filed for the same.
(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 any Bank or Financial Institution 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 April, 2012 subject to other conditions laid down in paragraph-7 of WBIS-2013 for MSMEs.
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, excluding the cost of any second hand plant and machinery purchased and installed for the purpose of implementation of the 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 State Electricity Board.
e. Bank charges and service charges paid to the National Small Industries Corporations or the State Small Industries Corpn.
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 (excluding Sales Tax or value added tax and excise duty) for indigenous machinery from the place of their manufacture to the site of the enterprise.
i. Charges paid for technical know how 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 April 2012 will be taken into account in calculating the total fixed capital investment.
(xii) “Micro Unit/ Enterprise” in the manufacturing sector means a unit/ enterprise classified as such in MSMED Act ,2006.
(xiii) “Small unit/enterprise” in the manufacturing sector means a unit/ enterprise classified as such in MSMED Act ,2006.
(xiv) “Medium unit/enterprise” in the manufacturing sector means a unit/ enterprise classified as such in MSMED Act ,2006.
(xv) “State Financial Institution” means the West Bengal Financial Corporation.
(xvi) “State Government” means the Government of West Bengal.
(xvii) “Unit”/ “Enterprise” means any industrial project in the micro, small and medium sector including industrial cooperatives and industrial selfhelp groups, which has filed Entrepreneurs Memorandum (Part-II).
(xviii) Wherever in the West Bengal Incentive Scheme 2013 for Micro Small & Medium Enterprises, the words ‘General Manager of District Industries Centre’ appears they shall be synonymous with the words ‘Deputy Director of Micro & Small Scale Enterprises(Anc.) of Sub-DIC, Durgapur’ and ‘Officer-in-Charge of Sub-DIC, Siliguri’.
(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 WBIS 2013 for MSMEs.
5.1 The WBIS 2013 for MSMEs shall generally be applicable to all micro, small and medium enterprises in the manufacturing sector which have started production on or after 1st day of April 2013.
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 WBIS 2013 for MSMEs.
The WBIS 2013 for MSMEs shall not be applicable to the industrial units/ enterprises;
(i) That have 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 have 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 have been registered and for which eligibility certificates have been issued in terms of the respective Incentive Scheme of the State but no claim has been made. The claim will be governed by the respective Incentive Scheme of the State.
(iv) That have commenced production before 01.04.2013 and applied for registration and EC 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.
(v) That are engaged in manufacture of textiles, apparel/garment, technical textile and enterprises in hosiery, textile, handloom and powerloom sector and have commenced production on or after 01.09.2013.
7. Eligibility criteria for incentives under WBIS 2013 for MSMEs.
7.1 Any micro, small or medium unit/enterprise in the manufacturing sector shall be eligible for incentives under WBIS-2013 for the MSMEs excluding those mentioned in the negative list of industries at annexure ‘E’ subject to the fulfillment of the conditions specified below:-
(i) A micro, small or medium enterprise claiming to be eligible for incentive(s) available under the WBIS- 2013 for MSMEs shall commence its production within the period of the Scheme and shall duly apply to the General Manager, District Industries Centre in Form No. I annexed hereto for obtaining Eligibility-cum-Registration Certificate within 12 (twelve) months from the date of commencement of production or from the date of this Notification whichever is later.
Explanation
A micro, small or medium enterprise which will commence its production on 29.03.2018 shall duly apply within 28.03.2019 to the General Manager, District Industries Centre concerned in prescribed form stated hereinabove for obtaining Eligibility-cum-Registration Certificate.
(i) The unit/enterprise shall file Entrepreneurs Memorandum (Part – II).
(ii) The project will be covered by a detailed feasibility report/ project prepared for the purpose and approved in terms of Sub-para 7.1 (v).
(iii) The unit/enterprise will obtain Eligibility-cum-Registration Certificate from the General Manager, District Industries Centre.
(iv) A new project should be approved before its implementation by any Directorate under the Department of Micro and Small Scale Enterprises and Textiles, Government of West Bengal or concerned DIC or Micro Small and Medium Enterprises Development Institute (MSME-DI), Government of India or Food Processing Industries and Horticulture Department, Govt. of West Bengal 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, issue of Eligibility-cum-Registration Certificate shall be considered provided the General Manager, District Industries Centre is satisfied about 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/Subsidy Scheme of Govt. of India/ State Govt. shall also be eligible to get the benefits of other items only under WBIS-2013 for MSMEs subject to fulfillment of terms and conditions of the Scheme.
(vi) The enterprise will duly execute an affidavit on non-judicial stamp paper of Rs.100/- or more duly notarized by Notary Public affirming:
(a) That the unit /enterprise has installed Modern/Hi-tech plant & machinery that conform to the standard productivity.
(b) That the unit/enterprise will strictly observe requisite pollution control compliances.
(c) That the unit/enterprise will conduct regular Energy Audit and ensure standard energy efficiency wherever applicable.
(d) That the unit /enterprise will follow/maintain labour laws.
(e) That the unit/ enterprise will remain in production for atleast five years from the date of commencement of production.
(f) That the unit/enterprise has not defaulted in payment of any government dues /dues of Financial Institutions.
(g) That the enterprise has not misrepresented or withheld any information and not suppressed any fact/ information related to the claim submitted.
(h) That all documents like approved project report, bills/ vouchers of the plant and machinery etc. submitted by the enterprise with the claim are genuine.
(i) That the terms and conditions of WBIS -2013 for MSMEs are binding on the enterprise.
(j) 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 Unit/Enterprise will make applications in prescribed forms to the General Manger of District Industries Centre after commencement of production, praying for Eligibility cum Registration Certificate under WBIS-2013 for MSMEs and for grant of incentives under the Scheme after obtaining Eligibility cum Registration Certificate.
8. Classification of developed areas and backward areas.
8.1 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 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 municipal areas), Siliguri Municipal Corporation, Municipal Corporations/ Municipal Areas of Paschim Medinipur, Purba Medinipur, Burdwan and Nadia.
Zone-C: Districts of Burdwan (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).
Zone-D: Districts of Birbhum, Purulia, Bankura, Paschim Medinipur (excluding municipal corporation/ municipal areas), Uttar Dinajpur, Dakshin Dinajpur, Cooch Behar and Sundarban Areas of South and North 24 Parganas districts.
9. State Capital Investment Subsidy:
9.1 An eligible micro or small enterprise located in Zone C & D area will be entitled to State Capital Investment Subsidy for its approved project as follows
Micro Enterprise
Zone C – 25% of the Fixed Capital Investment Zone D – 40% of the Fixed Capital Investment
Small Enterprise
Zone C- 15% of the Fixed Capital Investment Zone D -30% of the Fixed Capital Investment
9.2 An additional subsidy of 20% on State Capital Investment Subsidy normally admissible will be provided to all eligible micro and small enterprises wholly owned by women, SC/ST, and minority community entrepreneurs.
9.3 An eligible micro or small enterprise wholly owned by women, SC/ST, and minority community entrepreneurs and set up in Zone – A and B area will be entitled to State Capital Investment Subsidy as follows :
Micro Enterprise :- 15% of the Fixed Capital Investment
Small Enterprise :- 10% of the Fixed Capital Investment
9.4 The subsidy normally admissible and additional subsidy taken together will not exceed Rs. 50 Lakh for a Small Enterprise.
10. Interest Subsidy on Term Loan:
10.1 An eligible micro, small or medium enterprise 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 – Subvention of 6% for 5 years.
Zone C & D- Subvention of 7.5% 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 x 6 / Rate of Interest charged by the Bank/ F.I.
Medium Enterprise –
Zone – B & C :- The interest subsidy will be 25% of total Term Loan interest paid by the enterprise subject to a ceiling of Rs. 175 lakh per year for 5years .
Zone – D :- The interest subsidy will be 25% of total Term Loan Interest paid by the enterprise subject to a ceiling of 175 lakh per year for 7 years.
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 enterprises x 25 / 100
10.2 The interest subsidy will be payable annually subject to submission of a statement/ certificate (in annexure-A) by the lending Bank/ Financial Institution to substantiate that the unit has paid the due interest to the institutions 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 for its approved project will be entitled to waiver 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 production.
Zone C & D – 75% waiver of electricity duty on the electricity consumption for 5 years from the date of commencement of production.
An eligible micro or small enterprise wholly owned by women, SC/ST and minority community entrepreneurs will be entitled to 100% waiver of electricity duty on the electricity consumed for 5 years from the date of commencement of production of its approved project irrespective of location.
Medium Enterprise –
Zone – B & C – 100% waiver of electricity duty on the electricity consumption for 5 years from the date of commencement of production subject to a maximum of Rs. 25.00 lakh per year or Rs.1.25 crore in 5 years.
Zone – D – 100% waiver of electricity duty on the electricity consumption for 5 years and 75% waiver from the 6th year upto 10th year from the date of commencement of production subject to a maximum of Rs.50.00 lakh per year or Rs.2.50 crore in 5 years.
12. Power Subsidy:
An eligible micro, small or medium enterprise 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 area for five years from the date of commencement of production.
The power subsidy will not exceed 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 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 for its approved project will be entitled to a reimbursement of 25% of the cost of 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 or small enterprise will be entitled to a reimbursement of stamp duty and registration fee paid by it for the purpose of registration of documents within the State relating to purchase of land and/ or buildings for setting up of the approved project at the following rates :-
Micro & Small Enterprise :
Zone – A – 25%
Zone – B – 50%
Zone – C – 75%
Zone – D – 100%
14.2 An eligible medium enterprise located in Zone – B, C and D area will be entitled to a reimbursement of 75% of Stamp Duty paid by it for the purpose of registration of documents within the State relating to purchase of land and/ or buildings 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 unit/ enterprise for implementation of the approved project.
15. Refund of Entry Tax:
15.1 An eligible micro, small or medium enterprise will be entitled to refund of entry tax paid by it to the Govt. of West Bengal for procurement of plant and machinery for the approved project. The refund will be made available after commencement of production by the enterprise.
15.2 An eligible micro, small or medium enterprise will be entitled to refund of entry tax paid by it to the Govt. of West Bengal for procurement of raw materials for the initial three years for implementation of the approved project. The refund will be made available after commencement of production by the enterprise.
16. Refund of Value Added Tax (VAT):
An eligible micro, small or medium enterprise for its approved project will be entitled to refund of VAT paid to the Govt. of West Bengal as follows :-
Zone – B & C – 80% VAT refund paid for eight years from the date of commencement of production or 75% of Fixed Capital Investment whichever reaches earlier.
Zone -D – 90% VAT refund paid for eight years from the date of commencement of production or 75% of Fixed Capital Investment whichever reaches earlier.
17. Refund of Central Sales Tax (CST):
An eligible micro, small or medium enterprise for its approved project will be entitled to refund of CST paid by it for three years from the date of commencement of production.
18. Subsidy for Water Conservation/ Environment Compliance:
An eligible micro or small enterprise for its approved project will be entitled to a reimbursement of 50% of expenditure incurred by it towards cost of captive Effluent Water Treatment Plant for wastewater recycling and cost of pollution control devices subject to a maximum of Rs.2 Lakh.
19. Subsidy for Standard Quality Compliance:
An eligible micro or small enterprise shall be reimbursed 50% of the expenditure incurred subject to a maximum of Rs.5 Lakh for obtaining ISI/ BIS certification/ ISO 9000/ ISO 14000/ ISO 14001/ ISO 18000 certification from approved Institutions/ Research Laboratories.
20. Work Force Welfare Assistance:
20.1 An eligible micro, small or medium enterprise 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 – 9 years.
20.2 The reimbursement of expenditure specified in sub-para 20.1 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.
20.3 ‘Employee’ will have the same meaning as defined under “Employees’ Provident Fund Act,1952” and “Employees’ State Insurance Act, 1948”.
21. Subsidy for Patent Registration:
An eligible micro, small or medium enterprise for its approved project will be entitled to a reimbursement of 50% of expenditure incurred by it for obtaining Patent Registration for its products subject to a maximum of Rs.5 Lakh.
22. Power to amend and/or relax:
Notwithstanding anything contained in any of the provisions of WBIS 2013 for MSMEs, 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 relaxation in applying the provisions of this Scheme but such relaxation shall be made on merits of the approved project in each case, as the State Government 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. Repeal and Saving.
23.1 The West Bengal Incentive Scheme, 2007 for Micro & Small Scale Enterprises shall stand repealed except in respect of para 6 and subpara 23.3 of the present Scheme.
23.2 The benefits extended to the units/enterprises under any previous Incentive Scheme shall continue to be governed under the respective Scheme.
23.3 Micro and small enterprises which have started production on or after 01-01-2013 and before 01.04.2013 and filed EM(Part-II) within three months from the date of commencement of production and have not applied for Eligibility cum Registration Certificate under WBIS 2007, will be allowed to apply within six months from the date of this notification for registration and EC. This will be governed by the West Bengal Incentive Scheme 2007.
23.4 If an enterprise falling under any of the three categories of enterprises as defined in the MSMED Act, 2006, 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.
23.5 In the event of WBST Act, 1956/ WBVAT Act, 2013/ CST Act, 1956/ Entry Tax Act being replaced by any other Act, the provision of the Scheme will apply mutatis mutandis even after the new Act comes into force.
This scheme is issued with the concurrence of the Finance Department vide their U.O. No. 408 dated: 20.01.2014.
By Order of the Governor
RAJIVA SINHA
Principal Secretary to the
Government of West Bengal