1. Shweta Malpani (CA Final)
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2. Shweta Malpani (CA Final)
PACKAGE SCHEME OF INCENTIVES 2013 (PSI)
Government provides various schemes to promote industrial development. Among
the various schemes provided by the government one of them is the Package Incentives
Scheme 2013 (PSI 2013). These schemes are given to New Industrial Units/Expansion
Units set up in developing regions mentioned under the Scheme. To help the units
achieve higher and sustainable economic growth through greater Private and Public
Investment in industrial sector, The PSI-2007 Scheme is Amended & PSI-2013 is
introduced.
PSI scheme is applicable from 1st
April, 2013 up to 31st March, 2018. It is available
to industries, manufacturing enterprises, cold storages, biotechnology manufacturing
units, food processing industries, central public sector units. The amount of incentive
which is available depends upon the place (area) where it is located.
For availing PSI scheme, Eligibility Certificate (EC) is to be obtained. Eligibility
Certificate shall mean the certificate issued by the Implementing Agency to the Eligible
Unit under the PSI which indicates the accepted Fixed Capital Investment, Actual Fixed
Capital Investment made, Finished Products and other details along with Quantum of
Incentives, Period of validity for availing of incentives and the terms and conditions to
be complied with by the concerned Unit in whose favour such certificate is issued.
For the purposes of the PSI-2013, detailed talukawise classification are(i) Group A:
Industrially developed areas (ii) Group B: Areas where some industrial development has
taken place, but are less developed than the areas under Group A. (iii) Group C: Areas,
which are less developed than those covered under Group B. (iv) Group D: lesser-
developed areas of the State, not covered under Group A/B/C. (v) Group D+: least
developed areas, not covered under Group A/B/C/D. (vi) No Industry District:having no
industries and not covered under Group A / B/ C/ D & D+ . vii) Naxalism Affected Area.
For expansion of project, Fixed Capital Investment should increase installed
capacity by at least 25% of the Gross Fixed Capital Investment of the previous financial
year. The minimum additional fixed investment (for Micro, Small, Medium
Manufacturing Enterprises [MSME]) should be 25 lakhs & for non MSME-Rs.5 Crore.
Also, there should be increase in the employment to the extent of 10% out of which
80% should be local.
Incentive would be provided as a percent on Fixed Capital Investment (depending
upon the area where such unit is located). PSI also provides Industrial Promotion
Subsidy (IPS) for MSMEs which is subsidy available on VAT (Value Added Tax) and

3. Shweta Malpani (CA Final)
Central Sales tax. Moreover, interest subsidy is also provided on interest actually paid to
banks/financial institutions (for grant of term loan for acquisition of fixed assets) which
shall not exceed the bills paid for electricity consumed. Exemption from payment of
electricity duty is provided for a period not exceeding 15 years. Also, new units & those
undertaking expansion/diversification are exempted from payment of stamp duty.
Power tariff subsidy will be available at Re. 1/ Re 0.50 per unit depending upon the area
where the unit is located for a period of 3 years from the date of commencement of
commercial project. The above mentioned incentives would depend upon the type of
enterprise under which it is categorized and the place where it is situated.
Incentives shall be also be admissible to the MSMEs and LSIs so as to promote
Quality Competitiveness, Research & Development, Technology Upgradation, Water &
Energy Conservation, Cleaner Production Measures and Credit Rating. Also incentives
for Credit Rating of MSMEs would be provided. New MSMEs, LSI and Expansion thereof
will be eligible for incentive on cost of water audit, energy audit, Capital Equipment
under the measures to conserve/recycle water & for improving energy efficiency.
The amount of incentives to be disbursed will be in installments divided
proportionately per year depending upon the provisions as stated in the Scheme. Under
the PSI-2013 the unit should commence production and acquire the fixed assets within
the investment period which may differ from 3-5 years or such greater period as may be
approved, depending upon the category of enterprise.
The Eligible unit has to submit to the Implementing Agency, within a period of 9
months from the close of every year, a certified true copy of the audited annual
statement of accounts and Balance Sheet for the said year. The Implementing Agency
can call for any information for a shorter period even prior to the close of the year.
Failure on the part of an Eligible Unit to submit any of the above information /
documents shall mount to breach of the provisions of the PSI-2013, which may entail to
cancel the EC, or premature recall of and immediate recovery of the incentives drawn /
availed.
Framed by:
Shweta Sanjay Malpani
CA Final Student
Akola-444001
Maharashtra
shwetasmalpani94@gmail.com