Emerging Assam- Understanding Its Industrial & Investment Policy

Despite being rich in natural resources and having huge human capital, Assam’s growth rate has been far behind than that of other industrialized states. One of the main reasons behind this is lack of employment opportunities. So, in order to curb these problems, the state government focuses on promoting MSME sector through its Industrial & Investment policy, 2014.

Objectives:

• To increase GDP of the state by facilitating economic growth of manufacturing and Service sectors.
• To generate employment and income specifically in rural areas.
• To attract investment in MSME sector.

Duration of the Policy:

The policy will be effective till February, 2019.

Eligibility Criteria:

• All New Units as well as other existing units (except Pan Masala, Coke, and Petroleum etc) are eligible.
• Any unit having a minimum 80% share of Assamese in the Management position and 90% share of Non-Management people.
• Units belonging in Private Sector, Joint Sector, Co-operatives, Partnership firm, Self-help Group (SHG), Trust, NGO and units set up by State Government are eligible.
• The unit having Expansion/Modernization/ Diversification are also eligible but only for their affected portion.
• Service sector activities like Employment oriented skill building/Vocational Training Institute, Hotels/Resorts above 2 Star category and Diagnostic facility (specializes in Aid, Lever, Kidney, Heart and Brain) are eligible.

Exceptions:

• Units availing grants/ incentives from any Government/ Foreign Agencies.
• Undertakings by Central Public Sector.

Main highlights:

Simplification of Procedures-

The state gives adequate importance to MSME sectors through employment generation, simplifying procedures, setting up new business units either through government agencies or PPP (Public Private Partnership) model.

Incentives-

New Micro units will be granted State Capital Investment subsidy at 30% on the amount spent on workshop shed for production activities, plant & machinery, cost of land, installation & internal electrification amounting to a maximum of ₹ 10 lakh.

1.Tax Exemptions:

All eligible units will be entitled tax exemption under the Assam Value Added Tax Act, 2005, the Central Sales Tax Act 1956, Assam Luxury Tax Act 1989, whichever is applicable in the following manner:

• VAT Exemption:

(a) Micro units: Amount of Tax Exempted or 15 years, whichever is earlier.

(b)Other than Micro units:

Duration	Tax Exemption
1st & 2nd Years	100%
3rd & 4th Years	80% of tax payable subject to 50% of installed capacity of the unit
5th to 15 years onward	50% of tax payable subject to utilization of 60% of the installed capacity of the unit

• Entry Tax: All eligible units including State Public Sector Units (PSU’s) are entitled for exemption of payment of Entry Tax on plant & machineries.
• Luxury Tax: Hotels are exempted 50% of Luxury Tax for 10 years in addition to exemption of Entry Tax on Plant & Machineries.

2.The fee a unit pays to get BIS/ISO/FPO/AGMARK certification and technical efficiency from recognized research labs/Institutions like CFTRI, CIPET, etc. will also be subsidized to a maximum 75% amounting to a limit of ₹ 2 lakh per unit.

3.Educational Institutions, Research facilities, Hospitals, Nursing Homes and Public utility facilities will be entitled for 20% State Capital Subsidy on the cost of PV Modules up to 20 KW in addition to any other incentives provided by the Central Government for PV Modules.

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