STATE
POLICIES

RAJASTHAN STATE INDUSTRIAL POLICY

INCENTIVES/CONCESSIONS

The existing package of incentives has been reviewed to focus on thrust sectors and also to remove certain anomalies and deficiencies. The new package will consist of the following schemes:

SALES TAX EXEMPTION/DEFERMENT SCHEME, 1998

A new Sales Tax Exemption/Deferment Scheme, 1998 has been brought out in place of the existing scheme of 1989. This scheme is different from the earlier scheme in the following respects.

The new scheme is comparatively simple with greater clarity and ease of interpretation.

The quantum of incentives would be given on a tapering basis for a much longer period of 11 to 14 years.

The quantum of incentives is generally higher for thrust sectors, excepting where such fiscal support is not considered essential.

Similarly, in order to promote systematic development and clusters, a higher scale of incentives has been provided for Growth Centres.

The restriction regarding establishment of a project on the site of an existing unit manufacturing similar goods has been dropped and incentives have been linked to capacity and ;investment, rather than with location.

The scope of the eligible fixed investment has been enlarged to include expenditure on in-house training facilities, research and quality control equipments.

In the new incentive scheme, benefits will be available from the date of first sale, or the date of expansion/ diversification, or the date of declaration of sickness, as the case may be.

Customised packages would be offered to premier projects with an investment of Rs.150 crores and above and regular employment of 500 persons, or other special projects in the thrust sectors.

28.2 PURCHASE TAX

In order to encourage value addition of products in the State, the State Government has been allowing concessional purchase tax on a large number of raw materials used in the manufacture of goods. These concessions would be reviewed and rationalised.

28.3 INTEREST SUBSIDY

A scheme for providing interest subsidy in place of capital investment subsidy is being introduced. Interest subsidy will be available to industrial units having investment in plant and machinery up to Rs.60 lakhs. Interest subsidy would be provided at the rate of 2% on the documented rate of interest up to the repayment period originally agreed by the financial institutions/Banks subject to overall ceiling of Rs.15 lacs. The subsidy would be available for regular repayment to financial institutions/Banks. The scheme will be operated up to 31st March, 2003.

28.4 OCTROI EXEMPTION

28.4.1 The Octroi exemption scheme would be further extended for the IX Five Year Plan period. The benefit will be available to new units for plant and machinery and raw materials for 5 years in case of urban areas and 7 years in rural areas. However, to units undertaking expansion and diversification octroi exemption would be available on purchase of plant and machinery only.

The procedure for granting octroi exemption has been further simplified. Provisional octroi exemption certificates will now be issued by GM, DIC for a period of four months on receipt of application for import of plant and machinery and raw materials. A Pass Book will be issued to facilitate uninterrupted movement of goods.

Industrial areas of RIICO which are at present located outside the municipal limits of the new industrial areas of RIICO which will be developed outside the Municipal limits in the next 5 years will not be brought within the Municipal limits atleast up to 31.3.2003.

District Level Committee for granting octroi exemption shall be reconstituted by inducting therein a representative of local industry to be nominated by District Collector. However, the decisions shall be taken only with the approval of GM, DIC and the representative of the concerned local authority.

Clarification shall be issued by the LSG that upon a certificate issued by the GM, DIC concerned that the goods exempted from octroi being imported by an industrial unit located outside the Municipal limits for its consumption are only being transported through the Municipal limits, no octroi duty shall be levied thereon. In such cases only prescribed TP charges shall be raised and not the full amount of octroi.

28.5 DG SET SUBSIDY

Subsidy on DG Sets would be provided to SSI units on purchase of DG sets at the rate of 25% of the purchase value subject to a maximum of Rs.2.50 lakhs. This facility will be available up to 31.03.2003.

28.6 RATIONALISATION OF STAMP DUTY

The present stamp duty structure has been rationalised to provide relief to entrepreneurs. Some important changes made in the existing structure are as under:

S.No.

Item

Concession

1.

Custom Bond

Reduced to 0.1% from 1% of the Bond amount subject to a minimum of Rs.100 and a maximum of Rs.1000/-

2.

Security Bond of Mortgage Deed.

Reduced from 0.5% to 0.1%

3.

Registration of document.

Fee of 1% subject to a maximum ceiling of Rs.25,000/-

Concessions in Stamp Duty would be extended in the following cases:

In cases of revised partnership deeds/supplementary lease deeds based on will/ succession/ family settlement as also in the cases where documents are executed on mere change in the name of the firm or company without change in constitution would attract a duty of Rs.100 provided the parameters of Article 5 (c) of Rajasthan Stamp Adaptation Act are met with.

In case of change in partnership/ shareholding even if the transfer involves less than 50% of share, Rs.500/- will be levied as stamp duty on execution of document for change of partnership; however, in the cases of execution of document for change of partnership; however, in the cases of execution of supplementary lease deed on induction of a new partner in lieu of a retiring partner, the stamp duty will be levied on the basis of market value of the share as per article 23 of schedule II of Rajasthan Stamp Adaptation Act.

Sale and transfer of sick units/assets of taken over units by RIICO/RFC would continue to be exempt from stamp duty.

Where the lease deed is executed in any industrial area developed by RIICO, the stamp duty will be charged on prevailing rates as may be fixed by RIICO from time to time.

28.7LAND AND BUILDILNG TAX

28.7.1 The exemption limit for industries in respect of Land and Building tax has been raised from Rs.5 lakhs to Rs.20 lakhs. This would also be applicable to tourism related projects.

Land and Building Tax would be charged once in a year irrespective of change of hands. The tax would be charged on the market rate. In RIICO areas the rates determined by RIICO from time to time would be taken as the market rates for this purpose.

New Industrial Units will be exempted from payment of Land and Building tax for a period of four years from the date of production.

Sick units will be exempted from LBT in case a revival scheme is drawn by BIFR or financing institutions.

For the purpose of assessment of land and building taxes, in case of tourism related projects, the cost of land charged by RIICO/Department of Tourism shall be considered as the market value for computing the Land and Building Tax.

28.8 Incentive for Fly Ash/stone slurry based projects

The State Government will encourage projects based on fly-ash and stone slurry in the private sector. 100% sales tax and octroi exemption will be given for a period of ten years for setting up manufacturing facilities for bricks, building materials and other fly-ash/stone slurry based products.