Location Based Incentives: Doing Business in Rajasthan
A. The Rajasthan Investment Promotion Scheme 2010
Applicability: The Scheme offered by the state government, except for ineligible enterprises, is applicable to New Enterprises, Existing Enterprise making investments for Modernization /Expansion/ Diversification, Sick industrial enterprise for its revival and Enterprise which has set up Project for Common Social Good as defined under the Scheme; however subject to the condition that the Enterprise shall commence commercial production or operation during the operative period of the Scheme and meet conditions of minimum investment and minimum direct employment.
Validity: The Scheme has come into effect from 25.08.2010 and shall remain in force up to 31st March, 2018.
Highlights of the Incentive:
years (Ten years for MSME located in notified area) The maximum amount of subsidy shall be 50% of the total tax(es) that is VAT and CST or SGST (whenever introduced), which have become due and have been deposited into the government exchequer, however, an Additional Subsidy to the extent of 10% of the amount of said tax (es) which have become due and have been deposited into the government exchequer shall be allowed to Women/SC/ST/Person with disability (PwD) entrepreneur, by way of additional investment subsidy.
2. Other Exemptions:
- 100% exemption of Luxury Tax for seven years (Ten years for MSME located in the notified area) 50% exemption of Electricity Duty, Entertainment Tax, Land Tax and Mandi fee for seven years (Ten Years for MSME located at notified area).
- 50% exemption of Stamp Duty on purchase or lease of land and construction/improvement on such land (one time for each such transaction for the same project).
- 50% exemption of Conversion charge payable for change of land use (one time for each such transaction for the same project)
3. Customized Packages to the following Enterprises:
New Enterprises having investment of more than Rs. 500 crore and providing minimum employment to 200 persons;
Enterprises having potential of very high employment generation; and
Enterprises having special importance for the state as referred by Industries Department
4. Interest Subsidy
- Interest Subsidy of 5% would be provided where any loan borrowing has been obtained from any schedule commercial bank for creation of fixed assets and shall not include working capital loan, overdraft and current liabilities.
- An additional Subsidy of One percent shall be available to Schedule Caste/Schedule Tribe Entrepreneurs. However in case of lesser amount of interest the subsidy would be limited to lesser amount of interest.
- The sum total of both the wage and interest subsidy would be subject to the maximum limit of fifty percent of the tax payable under Rajasthan Sales Act, 1994, the Central Sales Act, 1956 and Value added Tax Act. This limit could be exceeded in the following cases:
In case of investment exceeds 100 Crores but is less than or equal to 200 Crores,
the maximum amount of subsidy would be 60%
In case of investment exceeds 200 Crores, then the maximum amount of subsidy would be 75%
- Both Wage and Interest subsidy would be available for a period of seven years. In case of SEZ units located in backward or rural areas the subsidy would be available for 10 years In case of existing units the amount of subsidy shall be subject to the maximum limit of fifty percent of the additional tax payable under Rajasthan Sales Act, 1994, the Central Sales Act, 1956 and Value added Tax Act payable and deposited over and above the highest tax payable or deposited whichever is higher in any of 3 immediately preceding years.
- In addition to these subsidies the following exemption would be provided
o 100% exemption of luxury tax for 7 years
o 50% exemption of entertainment tax for 7 years.
o 50% exemption of electricity duty for 7 years.
o 50% exemption from stamp duty
o 50% exemption from conversion charge
o 50% exemption from mandi tax for 7 years
In case of Micro and small enterprises located in rural areas not covered in the Municipalities, Municipal corporations, and Urban development authorities and purchases the plant and machinery for setting of enterprises on or after 14.02.2008 the electricity duty exemption would be 75%.
INDUSTRY SPECIFIC INSENTIVES: FOOD INDUSTRY, AGRO-PROCESSING AND AGRICULTURE BUSINESS
- Incentives admissible under the Rajasthan Investment promotion Scheme, as amended from time to time.
- Additional Incentives under this policy;
o Incentive for new Employment Creation
o Electricity Duty Concession; 50% exemption for 7 years
o Stamp Duty Concession: 50% exemption in Food Parks
o Concession on land related issues
o Incentive for market development and diversification
Conversion of land: SDO to convert upto 10 hectares
Simplified Conversion process in designated agro processing zones
Government land on lease basis: Allotment at 10% of the prevailing DLC rate for
projects with the new technology
Exemption from Agricultural Land Ceiling Act
o Incentive for quality and standards
o Concession on direct purchase and market fee
o Incentive for new project development
o Incentives for early bird Projects: Projects with investment of Rs. 25.00 crores or more
which come into commercial production before 31.03.2012 will be eligible for enhanced
Exemption from Agricultural Land Ceiling Act
- Incentive for quality and standards
- Concession on direct purchase and market fee
- Incentive for new project development
- Incentives for early bird Projects: Projects with investment of Rs. 25.00 crores or more which come into commercial production before 31.03.2012 will be eligible for enhanced incentives.
Income Tax Exemption for Agro/Food Industries
An undertaking deriving profit from the business of processing, preservation, and packaging of fruits or vegetables or meat and meat products or poultry or marine or dairy product or from the integrated business of handling, storage and transportation of food grains shall be eligible for 100% deduction for first five years and thereafter 25% for 10 years.
INFORMATION TECHNOLOGY INDUSTRY
State’s Information Technology Policy 2007
Major Incentives are:
IT and ITES Policy 2007
Subsidy/Exemptions and Incentives:
To encourage establishment of IT SMEs in Rajasthan a subsidy up to Rs. 25 lacs at the rate of Rs. 10,000 per employee would be given to the first five IT/ITES companies investing in the state and directly employing more than 50 employees in IT or 100 employees in ITES Sector
50% exemption from Stamp Duty
VAT rationalized at par with the minimum floor rate of 4%
50% exemption from the payment of Electricity duty for 7 (seven) years to new units
Special Packages of Concessions and facilities to Information Technology (IT) Units like, rebate in land cost in designated parks by way of refund upto 60%
In case of cement plant established in jaiselmer district having minimum capacity of 3 million
tons per annum and minimum investment of Rs. 100 crores, the period of interest and the
wage subsidy would stand raised to 12 years.
SPECIAL ECONOMIC ZONES
Duty free import/ domestic procurement of goods for development, operation and maintenance
of SEZ units
100% Income Tax exemption on export income for SEZ units for first 5 years and 50% for
next five years and 50% of the ploughed back export profit for next 5 years
ECB by SEZ Units upto US $500 million in a year without any maturity restriction
through recognized Banking Channels
Exemption from Central Sales Tax
Exemption from Service Tax
Single Window clearance for Central and State level approvals
SEZs are exempted from land ceiling
Land Conversion @ Rs. 100/- in Rural areas for SEZ
100% exemption from luxury tax for 7 years
50% exemption from entertainment tax for 7 years
In case of textile sector, the maximum limit of interest subsidy shall stand raised to 60% instead
of the 50% in case of investment of more than 50 crores but less than or equal to
100 crores and to 75% in case where investment exceeds Rs. 100 crores.