Gujarat State MSME Subsidies and Policies for Small Enterprises

GUJARAT STATE SUBSIDIES AVAILABLE TO MSME UNITS CA. JATIN JAJAL WWW.JNJASSOCIATES.IN

Various Scheme of subsidy MSME scheme Large and Thrust Sector scheme Textile scheme MSME Shed Development Scheme Environment protection measures scheme Market development scheme Mega Industries CA. JATIN JAJAL

MSME Definition Notification dated 01.06.2020 MSME - (i) a micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees; (ii) a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; (iii) a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees. This notification shall come into effect from 01.07.2020. CA. JATIN JAJAL

MSME Definition - Turnover Exports of goods or services or both, shall be excluded while calculating the turnover of any enterprise whether micro, small or medium, for the purposes of classification. Information as regards turnover and exports turnover for an enterprise shall be linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN. What about new unit? CA. JATIN JAJAL

MSME Definition P&M "The expression plant and machinery or equipment of the enterprise, shall have the same meaning as assigned to the plant and machinery in the Income Tax Rules, 1962 framed under the Income Tax Act, 1961 and shall include all tangible assets (other than land and building, furniture and fittings)". WDV RBI circular 21.08.2020 New Unit? For FY 2022-23? CA. JATIN JAJAL

Benefits to MSME in Gujarat Aatmanirbhar Gujarat Scheme for assistance to MSME CA. JATIN JAJAL

Aatmanirbhar MSME Policy 2022 From 05/10/2022 to 04/10/2027 First disbursement Production date CA. JATIN JAJAL

Basics New Enterprise commencement of commercial production during operative period of the scheme Which date first sale bill or production started date? MSME for purpose of this subsidy only P&M criteria New enterprise (Separately identifiable fixed capital investment) Existing Enterprise Expansion 50%+ Investment in new GFCI (Out of which at least 60% in P&M) and 50%+ increase in installed capacity. Also reached to 75% of utilization of existing installed capacity in at least 75% in any one of preceding three financial year. GFCI WDV? Diversification - 25% in micro and small and 50% in Medium ent. Term loan from bank, inst. (excl NBFC) CA. JATIN JAJAL

Capital Subsidy MICRO UNIT Taluka I 25% (Max. 35L) Taluka II 20% (Max. 30L) Taluka III 10% (Max. 10L) Taluka list CA. JATIN JAJAL

Conditions Apply within one year from date of first disb. Or one year from date of commencement of commercial production or one year from date of issue of this GR Reimbursement loans CA. JATIN JAJAL

Interest subsidy Manufacturing Sector Taluka I 7%pa(Max. 35L pa) for 7 years Taluka II 6%pa (Max. 30L pa) for 6 years Taluka III 5%pa (Max. 25L pa) for 5 years 1% additional to women, differently abled and registered start up 1% additional to young (below 35 on date of sanction of loan) Enterprise must bear 2% int pa Installation of solar power plant (captive consumption in premises) Only interest subsidy CA. JATIN JAJAL

Service Sector Only Interest subsidy Same rate as of manufacturing but only eligible service providers as per list is eligible under service sector. Term Furniture/fixture (except land and building) loan on machinery, equipment, Only new MSME service sector!! Annexure A (ii) listed entities must have to give minimum employment to 10 persons and to have GST No CA. JATIN JAJAL

List of service sector Financial services Health services Transport and logistic And many more as per list. CA. JATIN JAJAL

Conditions for interest subsidy Either from date of first disbursement or from commencement of commercial production Apply within one year from date of first disb. Or one year from date of commencement of commercial production or one year from date of issue of this GR Term loan reimbursement No interest subsidy for default period (as per RBI guidelines)!! CA. JATIN JAJAL

Net SGST Reimbursement of MSME GFCI made in project or cost appraised by bank whichever is lower is considered. Quantum: Taluka I 100% of net SGST for 10 years up to 7.5% of EFCI pa. Taluka II 90% of net SGST for 10 years up to 6.5% of EFCI pa. Taluka III 80% of net SGST for 10 years up to 5%of EFCI pa. CA. JATIN JAJAL

Net SGST Reimbursement of MSME Separate registration for manufacturing Incentives allowed only for manufactured in the premises and not resale of any goods. Obtain incentives by showing inter state sales as intra state through intermediary / marking network or any other middle man which is directly or indirectly controlled by it then incentives stands cancelled. Reimbursement shall be on quarterly basis Apply within one year from commencement of commercial production CA. JATIN JAJAL

Net SGST Reimbursement of MSME GST Cash ledger GST Credit ledger GST Credit set of mechanism CA. JATIN JAJAL

Example 1 Particulars Amt IGST CGST SGST Total Sale outside Guajrat Sale in Guajrat 10,00,000 50,000 -- -- 10,50,000 20,00,000 -- 50,000 50,000 21,00,000 Purchase outside Gujarat Purchase inside Gujarat 7,00,000 35,000 -- -- 7,35,000 15,00,000 -- 37,500 37,500 15,75,000 GST payable 15,000 12,500 12,500 CA. JATIN JAJAL

Example 2 Particulars Amt IGST CGST SGST Total Sale outside Guajrat Sale in Guajrat 10,00,000 50,000 -- -- 10,50,000 20,00,000 -- 50,000 50,000 21,00,000 Purchase outside Gujarat Purchase inside Gujarat 15,00,000 75,000 -- -- 15,75,000 12,00,000 -- 30,000 30,000 12,60,000 Optional -25,000 -20000 -5000 GST payable -- -- 25,000 CA. JATIN JAJAL

General Conditions Loan from bank or FI (No NBFC) Only new building, New P&M, Old imported P&M GPCB must 85% local employee (60% supervisory or managerial) factory land NA order After completion of three years Production must reach to 50% of installed capacity. Otherwise, reduction in subsidy! CA. JATIN JAJAL

CGTMSE fee reimbursement 100% of annual service fee for term loan is eligible for reimbursement for the period of five years Service and trading activity is not eligible! CA. JATIN JAJAL

Aatmanirbhar Large and Thrust Sector Subsidy Interest subsidy Investment in P&M above Rs. 50 Cr Not eligible if within municipal corporation limit of city Interest subsidy: Taluka General Sec. Thrust Sec. I 7% on TL for 10 years up to 1% of eFCI 7% on TL for 10 years up to 1.2% of eFCI II 7% on TL for 8 years up to 1% of eFCI 7% on TL for 10 years up to 1% of eFCI III 7% on TL for 6 years up to 1% of eFCI 7% on TL for 8 years up to 1% of eFCI CA. JATIN JAJAL

Aatmanirbhar Large and Thrust Sector Subsidy State GST subsidy Net State GST reimbursement Quantum of incentive : Taluka General Sec. Thrust Sec. I 100% of net SGST for 10 years up to 7.5% of eFCI p.a. 100% of net SGST for 10 years up to 8% of eFCI p.a. II 90% of net SGST for 10 years up to 6.5% of eFCI p.a. 80% of net SGST for 10 years up to 5% of eFCI p.a. 90% of net SGST for 10 years up to 7% of eFCI p.a. III 80% of net SGST for 10 years up to 5.5% of eFCI p.a. CA. JATIN JAJAL

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