The state government of Bihar launched its Industrial Investment Policy in the year 2011 with a view to establish new industries, develop international level of basic infrastructure and to attract more domestic and foreign investment.
Fiscal incentives under this policy:
Tax related exemption-
- Stamp duty/registration fees- All new MSMEs and large industries are entitled for a 100% exemption from Stamp duty/Registration fees on purchase/lease land/shed in the industrial park or outside of Industrial Area Development Authority.
- Entry Tax- All new units are granted 80% reimbursement of the Entry Tax they have paid.
- Central Sales Tax- Registered MSME of IT/ITES/ EHM units only need to pay 1% CST on the items they have produced.
Post-production incentives– The maximum limit of reimbursement in this section is Rs. 600 lacs.
Incentive-for preparation of project report-
- The industrial units are getting 50% reimbursement of the project report cost, amounting to a maximum of Rs. 2 lacs.
- Units who have obtained carbon credit, project reports for those have been granted 50% reimbursement with maximum amount of Rs. 15 lacs.
Incentives on Land- All units are eligible for incentives or grants on the value of land/park that are allotted to them by Bihar Industrial Area Development Authority/Export Promotion Industrial Park/Food Park/Agri- Export Zone / IT Park/Industries or Govt. as follows-
|Micro/Small Units||50% or Rs. 15 Lacs (Max.)|
|All Large, Medium and Mega units||25% or Rs. 30 Lacs (Max.)|
- New MSME industrial units are entitled for a 20% capital subsidy on the amount spent on plant and machinery, amounting to a maximum of Rs. 75 lacs.
- Same way, new large industrial units are entitled a 20% capital subsidy on the amount they have spent on plant and machinery, with a maximum amount of Rs. 500 lacs.
|Units||Reimbursement percentage||Period of time||Maximum Ceiling|
|New MSME Units||80%||10 years||300% of capital investment|
|New industrial units of Brewery and Distillery||25%||10 years||300% of capital investment|
All eligible MSME/Large units are entitled to get benefits of incentives on Technical Know-how, Incentive on investment on Plant& Machinery for Captive Power, Incentive on Quality Certification, and Exemption in Entry Tax/Luxury Tax/Land Concession. These benefits are the same what Bihar ICT policy is offering.
Other special benefits-
- Any SC/ST/Women/Specially abled entrepreneur is entitled for an additional grant/exemption/subsidy of 5%.
- An entrepreneur belonging to the aforementioned category is entitled for a 100% reimbursement on the amount of VAT he/she has paid to set-up small or tiny enterprises. The maximum amount however has to be Rs. 30 lacs.
Subsidy on employment generation-
Any industrial unit which is responsible for employing at least 100 people is entitled for an additional incentive. This incentive amount is equivalent to the EPF (Employee Provident Fund) paid by the unit to new employees for 1 year. For example- if a unit has paid Rs. 25,000/- as PF for 1 employee for a year, then for 100 employees, the amount would be Rs. 25 lacs (100 x 25,000 = Rs. 25 lacs). So, the unit is eligible to get Rs. 25 lacs as subsidy.
Apart from the above mentioned incentives, the state also has envisaged to provide additional incentive to give attract large capital investment proposals of more than Rs. 500 crores. Henceforth, these units are eligible to get 20% capital subsidy incentive with the maximum amount of Rs. 30 crores.