Category: Finance

Electric Duty Exemption

100% Electric Duty Exemption Subsidy

Posted on by SDS Fin Advisory

1. Introduction

The Gujarat State Government has introduced several subsidy schemes to promote industrial growth and self-reliance in the state. One of these schemes is the Electric Duty Exemption Subsidy, which offers significant benefits to manufacturing units.
Apart from Electric Duty Subsidy, many subsidies are available for manufacturing unit. Do check out our recent blog on Aatmanirbhar Subsidy Scheme. 
Understanding and taking advantage of this subsidy can result in huge savings on your electric bills and contribute to the growth of your manufacturing unit.

2. What is the Electric Duty Exemption Subsidy?

The Electric Duty Exemption Subsidy is a government initiative aimed at reducing the financial burden of electricity costs for industrial units in Gujarat. Through this subsidy, eligible new & existing manufacturing units are exempted from paying electricity duty on the electric bills for 5 years.

3. Eligibility criteria for industrial Units

  • The subsidy is available for both new and existing manufacturing units that include proprietorship Firms, Partnership Firms, LLP firms, Private Limited & Limited Companies.
  • For Existing enterprises other criteria must be fulfilled such as new machinery investment to be more than 50% of the existing machinery, installation of sub-meter, etc.
  • Eligible units have to apply within 90 days of starting commercial Production to avail the benefit of 5 years.

4.  Example of RN Enterprise

Let’s understand it by taking the example of RN Enterprise.
RN Enterprise has established a new manufacturing unit in Gujarat. The unit has installed new machinery and started commercial Production on 01.04.2024.
  • Power Load – 150 KW
  • Monthly Bill Amount – Rs. 1,00,000 (Approx)
  • Monthly Electric Duty – Rs. 15000 (15%)
RN enterprise applied for Electric Duty Exemption within 90 days from commercial Production i.e 01.04.2024.
After successfully filling online application and uploading the necessary documents on https://ceicedeservice.gujarat.gov.in/#home, RN Enterprise will receive an Electric Duty Exemption Certificate for the period from 01.04.2024 (commercial Production) to 31.03.2029 (5 Years).
RN Enterprise got the benefit of a total of Rs. 9,00,000/- for 5 years.
(15000 duty *12 month *5 year)Govt. Subsidy Scheme

5.  Conclusion and key takeaways

In conclusion, understanding the Electric Duty Exemption Subsidy is crucial for industrial MSME/Large Units looking to optimize their operations and reduce costs. We hope that this guide has clarified any doubts or uncertainties you may have had about the Electric Duty Exemption Subsidy. Stay tuned for more informative content on subsidies and incentives for MSME/Large Units. Still if you have any queries you can ask on 8485966003 or mail me on sdsrajvi@gmail.com.
MSME Subsidy for Manufacturing Unit

Aatmanirbhar Gujarat Subsidy Scheme for MSMEs 2022

Posted on by SDS Fin Advisory

Introduction

The year 2022 brings exciting new opportunities for Micro, Small, and Medium Enterprises (MSMEs) in Gujarat, as the government introduces subsidy schemes to accelerate their growth and success. One of the key schemes in focus is the Aatmanirbhar Gujarat Subsidy Scheme for Assistant to MSMEs 2022.

Subsidies provide much-needed funding support that enables MSMEs to invest, construct, upgrade, and grow their businesses. With these subsidies in place, MSMEs can access tailored lending solutions with flexible repayment terms, lower interest rates, and minimal collateral requirements.

The government’s commitment to supporting MSMEs through these subsidy schemes reflects its vision of unlocking the economic potential of Gujarat’s MSME sector. By creating a favorable business environment and providing financial incentives, the government aims to foster entrepreneurship, drive innovation, and stimulate job creation in the state.

What are the MSMEs criteria for Subsidy purposes?

According to the subsidy schemes and criteria set for MSMEs by the Government of India, the definition and classification of Micro, Small and Medium Enterprises (MSMEs) is based on the following investment ranges:

  1. Micro enterprise – Investment in plant and machinery or equipment does not exceed Rs 1 crore
  2. Small enterprise – Investment in plant and machinery or equipment is more than Rs 1 crore but does not exceed Rs 10 crore.
  3. Medium enterprise – Investment in plant and machinery or equipment is more than Rs 10 crore but does not exceed Rs 50 crore.

The investment slabs used for determining eligibility and applicable subsidy rates or incentives for MSMEs under various schemes are based on this classification.

For example, if investment in Plant & Machinery is Rs. 5.00 Cr then the enterprise will be categorised as Small Enterprise.

The operative Period of the Scheme is 5 years from 05/10/2022- 04/10/2027

Here are the brief of various subsidy scheme available to MSME. Click here to know more about  Aatmanirbhar Subsidy Scheme. 

Subsidy Type Description
Capital Subsidy Offers subsidies upto 25% on term loans for procuring fixed capital assets like land, buildings, and machinery, varying based on Taluka categorization.
Interest Subsidy Provides interest subsidies up to 7% on term loans for up to 7 years, with special provisions for women, differently-abled, and young entrepreneurs.
SGST Subsidy Provides reimbursements of up to 100% of net SGST paid for up to 10 years to eligible MSMEs, varying from 80-100% based on the taluka category.
Start-up Subsidy Tailored capital and interest subsidies to nurture start-ups, covering significant expenses in early stages to stabilize and scale up operations.
Power Subsidy Offers 35%  additional Subsidy on Power Expenses  and interest subsidies to MSMEs investing in solar or renewable energy infrastructure, including capital cost subsidies and low-cost financing support.
Exhibition Subsidy Provide subsidy for the participation of various exhibition in local, state and international leval.
Electricity Duty Subsidy 100% reimbursement of electricity duty fees considerably to make MSME operations more cost-competitive, aiding in better profit margins and working capital management.
MSME Loan Support Facilitates partnerships with financial institutions for tailored lending solutions with flexible repayment terms, lower interest rates, and minimal collateral requirements, among other benefits.

These various types of subsidies aim to unlock the economic potential of Gujarat’s MSME sector. By providing financial assistance and support, the government strives to create a conducive environment for MSMEs to thrive and contribute significantly to the state’s economy.

Aatmanirbhar Gujarat Subsidy Scheme for Assistant to MSMEs: Driving Force for Entrepreneurship

The Aatmanirbhar Gujarat Subsidy Scheme for Assistant to MSMEs is a key initiative aimed at promoting entrepreneurship and supporting the growth of Micro, Small, and Medium Enterprises (MSMEs) in Gujarat. This comprehensive scheme offers various subsidies and incentives to enable MSMEs to thrive in a competitive business environment.

Eligibility Criteria

To avail the benefits under this scheme, MSMEs need to meet certain eligibility criteria. The specific eligibility requirements may vary based on factors such as investment range, location, sector, and business classification. However, some common eligibility criteria include:

  1. Being registered as an MSME under the relevant government authority
  2. Adhering to all statutory regulations and compliances
  3. Maintaining a good track record in terms of loan repayment and creditworthiness
  4. Fulfilling any additional criteria specified by the scheme

It is essential for entrepreneurs and MSME owners to thoroughly understand the eligibility criteria before applying for subsidies or incentives under this scheme.

(Source: Gujarat Government Industries & Mines Department)

Different Types of Subsidies under the MSME Schemes in Gujarat

The MSME schemes in Gujarat offer various types of subsidies to support the growth and development of micro, small, and medium enterprises. These subsidies are designed to provide financial assistance and incentives to eligible businesses, helping them thrive in a competitive market environment. Here’s a closer look at the different types of subsidies available:

Capital Subsidy

Provides up to 25% term loan subsidies for fixed capital assets such as land, buildings, and machinery, based on Taluka categorization.

Interest Subsidy

Offers up to 7% interest subsidies on term loans for up to 7 years, with special provisions for women, differently-abled individuals, and young entrepreneurs.

SGST Subsidy

Enables up to 100% net SGST reimbursement for a period of up to 10 years, with varying rates based on taluka category.

Start-up Subsidy

Tailored capital and interest subsidies designed specifically for start-ups in their early stages.

Power Subsidy

Provides an additional subsidy of 35% on power expenses and interest subsidies for MSMEs investing in solar or renewable energy infrastructure.

Electricity Duty Subsidy

Offers 100% reimbursement of electricity duty fees incurred by the MSMEs.

These subsidies play a crucial role in easing the financial burden on MSMEs and creating an enabling environment for their sustained growth and productivity. By understanding the details of each type of subsidy, businesses can make informed decisions regarding their eligibility and potential benefits.

Remember that these schemes have specific eligibility criteria and application processes, so it’s important for MSMEs to thoroughly understand the requirements and guidelines before applying.

Conclusion

The Aatmnirbhar Gujarat scheme offers a comprehensive range of initiatives like SGST reimbursements, attractive capital and interest subsidies, renewable power benefits, and accessible credit to create a congenial growth environment for MSMEs.

By alleviating infrastructural barriers through focused MSME subsidies, reducing tax/electricity burdens, and providing funding support, the scheme empowers small enterprises to amplify investments, foster innovation, and boost competitiveness.

This expansive blueprint for self-reliance aims to unlock the full economic potential of Gujarat’s MSME sector.

The Government also brings various loan scheme promoting MSME to get instant low interest and without collateral security finance.  To know more you can check our previous blogs on 100% MSME Loan without Collateral Security. 

 

Latest announcement by the finance minister to foster business in India

Posted on by SDS Fin Advisory

Recently when everyone was in the joy of Diwali week, Finance minister Nirmala Sitharaman announced multiple schemes for the businesses to take part in their happiness. Now businesses will get multiple benefits from the government of India. The finance minister announced a package of 2.65 lakh crores to stimulate Atma Nirbhar Bharat 3.0, where the main targets are MSMEs, housing, stretched, and farm sectors. Amid 10 PLI schemes, 5 more industries are included in the package that will consist of 12.7 lakh crores. It will attract the investors to put their money in the production of goods in India where the Indian market can increase the export of goods. Also, the government has supported the private and public sector by sharing the maximum 24% PF for the employees. The government will directly support every employer in the share of PF, which will enhance manufacturing in India. Every decision is taken under Atmanirbhar Bharat 3.0 package to increase production in India. Let's discuss the departments where the schemes are going to apply.

HOUSING FINANCE:

The incentives for housing relief are in two forms that come under the Atma Nirbhar Bharat. One is an Income tax benefit, and the other is higher incentives for Pradhan Mantri Awas Yojna. The tax is reduced to 3 percent where owners directly enjoy the relaxation. The application of the tax reduction will be limited to the value of 2 crores. It will help the owners to solve the unsold inventory, and it will differentiate the circle value and agreement value. Under the PMAY, the housing sectors will get the incentives of 18000 crores, of which the Finance ministry already sanctions 8000 crores.

DIFFERENT JOB SECTORS :

The government announced to boost up the companies with the employee share of 1000 employees. The employees that are hired between October 1, 2020, and June 30, 2021, will get the 24 % PF in which the government will share a 12 % PF amount to include in their accounts. The job sectors will get a boost, and it will promote Atma Nirbhar Rozgar Yojana.


The government has decided to include the healthcare services in the stressed services, and all these sectors will get credit from the government. It will directly give benefits to the MSMEs and other healthcare sectors. The government has exceeded 3 lakh crores for these industries, which can create a good impact on the export of goods.

Atmanirbhar PLI schemes :

The government has decided to support the manufacturing industry by offering them multiple incentives for the manufacturing of goods in India. It will enhance the number of products in India where businesses will get a direct advantage in the manufacturing of multiple things.


The government has decided to infuse 6000 crores in NIIF as the equity, which will enhance other projects and attract investors to invest more in the Indian market. There are some expectations by the government that the infra project financing is going to touch the 1.10 lakh crore mark by 2025.


Also, 65000 crores are reserved for farmers for the fertilizers and other needs. The farmers can enjoy these services for every crop season, which will allow them to grow more without any problem.


There is the amount of 3000 crores for EXIM bank that can be used for the project promotion that will come under the line of credit by the IDEAS scheme. The government is providing direct benefits to the businesses, which will help the economy to reach the target by the end of 2025.

For construction and infrastructures, the government is reducing the security from 5-10% to 3%, which is crucial to enhance the working capital of construction. It will entertain the contractors and other services to unblock the previous capitals to promote the construction services in the country.


Multiple schemes will foster the economy of India, which can help the businesses to create more resources for the promotion of Atma Nirbhar Bharat. It will enhance export services and enhance the manufacturing sectors.