With investing as little as Rs 1 crore in Punjab,you can avail benefits up to half your fixed cost of investment. For big-ticket projects Rs 500 crore or above it can go up to 80 per cent of fixed cost investment in terms of value added tax (VAT) and central sales tax (CST) exemptions.
After free power bills for farmers,Punjab took the freebie route in its new industrial policy that was approved by the Cabinet on Monday.
Deputy Chief Minister Sukhbir Singh Badal,who unveiled the policy,promised never before sops in terms of VAT and CST waivers,besides extending exemptions hitherto allowed only to mega projects Rs 100 crore and above. For small and medium scale industry,he announced waiver of electricity duty,stamp duty,property tax (urban areas),purchase tax,mandi fee,rural development and infrastructure cess (agro processing industry).
The sops,in Sukhbirs words,will attract investment of Rs 2 lakh crore in three years. These incentives are historic and will result in flight of industry from industrial states such as Gujarat and Madhya Pradesh to Punjab, he said.
Incentives for manufacturing industry will grow with scale of investment and are higher for 13 industrially-backward districts classified as Zone I Fazilka,Ferozepur,Tarn Taran,Amritsar,Gurdaspur,Pathankot,Hoshiarpur,Sangrur,Barnala,Mansa,Bathinda,Muktsar and Faridkot.
Zone I also includes all industrial parks,focal points and industrial estates. The VAT waiver in these districts is between 50 to 80 per cent with 75 per cent CST exemption for all categories of investments. The maximum quantum of incentives is capped at 80 per cent of fixed cost of investment (FCI).
In Zone II Patiala,Fatehgarh Sahib,Ludhiana,Moga,Jalandhar,Kapurthala,Shaheed Bhagat Singh Nagar and Mohali districts there will be no VAT or CST waivers up to an investment of Rs 10 crore. VAT retention will range between 25 to 40 per cent depending on the FCI,in addition to 50 per cent concession on CST. The maximum incentive in Zone II has been capped at 40 per cent of FCI.
Tax incentives are the highest for agro-processing industry,keeping in line with states crop diversification policy. These projects will be exempt from mandi fee,rural development fee,infrastructure development cess and purchase tax on wheat and milk.
The IT and knowledge industry will enjoy 100 per cent exemptions in terms of VAT and CST but it will be limited to the only two districts of Mohali and Amritsar being developed as the IT hubs,Principal Secretary (Industries) Karan Avtar Singh said during his presentation of the new policy.
A new category of projects fixed investment above Rs 500 crore will enjoy the highest 80 per cent VAT incentive and 75 per cent CST retention with maximum limit of 80 per cent of the fixed investment for 13 years.