State Government Incentives

1. Priority Sector 4. Interest Subsidy 7. Quality Certification 10. Water
2. Financial Support 5. Sales Tax 8. Land 11. Stampduty
3. General Provision 6. Patent Registration 9. Power

 PRIORITY SECTORS :

12.1 In addition to financial concessions provided in this policy, efforts will be made to prepare competitive profiles of priority industries in the State, so as to identify opportunities and constraints in detail. These will be addressed in sector-specific policies, if needed.

12.2 Some sectors already have separate policies, which will be updated taking into account new information and realities.

 FINANCIAL AND OTHER SUPPORT MEASURES :

ELIGIBILITY :

13.1 New and existing industrial units shall be eligible for incentives provided in this policy, subject to the general conditions and specific conditions stipulated.

13.2 Industrial units, hotels, cinema halls etc. covered under earlier Industrial Policy Resolutions shall continue to enjoy the incentives admissible under the said policy except to the extent abridged or modified or enlarged in this policy.

Existing industrial units, which take up modernization will be eligible for specific incentives as mentioned. However, defaulters of Banks, SIDBI, OSFC, IPICOL and Government / Government controlled agencies will be eligible for such incentives only after they clear the dues.

GENERAL PROVISIONS :

13.3 Implementation of various provisions covering the incentives, concessions, etc. will be subject to the issue of detailed guidelines/ statutory notifications, wherever necessary, in respect of each item by the concerned administrative Department.

13.4 An industrial unit, which considers itself eligible for any incentives shall apply in accordance with the operational guidelines and instructions set out in the Manual to be brought out and the same shall be considered and disposed of on merit.

13.5 Time frame for filing applications for different incentives -

A unit shall forfeit its entitlement to the grant of incentives if it does not file its claim complete in all respects, within 6 (six) months of its starting commercial production. The power to condone the delay not exceeding six months in submission of the above claim, shall vest with the Director of Industries, Orissa, while Secretary, Industries shall be competent to condone the delay exceeding six months and maximum upto one year in that context.

13.6 Determination of date of commercial production -

The date of commercial production for availing of incentives on sale tax or for, any other incentive, shall be the date determined by the "Shilpa Sathi" for Small Scale Industrial Units and the "Shilpa Jyoti" for the medium and large industrial units, basing on the totality of documentary evidence and recommendation of promotional or financial agencies, if any.

13.7 Transferred Units

A transferred unit after going into commercial production shall be eligible to avail of all or any of the incentives for the period for which the unit was eligible before transfer but could not avail of the same due to suspension of production or closure on account of sickness or for any other reason.

Any industrial unit seized under Section 29 of the State Financial Corporation Act, 1951 and thereafter sold to a new entrepreneur shall be treated as a new industrial unit for the purpose of sales tax concessions only. Arrears of sales tax, entry tax, MV tax, EPF, ESI and excise duty payable by previous owners shall not be realizable from the transferees of the transferred units under Section 29 of SFC Act. These, being public dues, shall be realizable from the previous owners under the Orissa Public Demand Recovery Act, 1962 or any other relevant Act.

13.8 Industrial Units set up without financial assistance from Financial Institutions and/or Banks will be required to be assessed by the appropriate nodal agency like IPICOL, OSFC, DIC and OSEDC etc. in order to be eligible for any of these incentives.

 INTEREST SUBSIDY :

14.1 New small scale industrial units in priority sectors will be entitled to interest subsidy @ 5 % per annum for a period of five years from the date of commercial production on term loans availed from recognised Financial Institutions/Banks.

14.2 Small Scale Industrial units (existing or new) which undertake modernisation will be eligible for interest subsidy @ 5% per annum for a period of five years from the date of completion of modernization on the term loans availed from the recognised Financial Institutions/Banks. This will be applicable to units where un-depreciated book value of the investment on plant & machinery before modernization is within the small-scale limit as prescribed.

14.3 The interest subsidy will be limited to Rs.20.00 lakhs in case of Small Scale Units and Rs.10.00 lakhs in case of tiny units.

Provided that the amount of interest subsidy payable under the above two clauses will stand reduced to the extent, there is any interest subsidy payable under any other scheme of either the State Government or the Central Government or any financial institution such as SIDBI, NABARD etc. Further the effective interest rate after the administration of interest subsidy will be minimum 10% i.e. if the normal lending rate is 16% the effective lending rate after interest subsidy will be 11% and if the normal lending rate is 12% after interest subsidy the effective lending rate will be minimum 10% and in this case the interest subsidy will be limited to 2%.

Provided further that the concerned promoter(s) would not have defaulted to OSFC / IPICOL / SIDBI / Banks / Recognised Financial Institutions / other Government agencies in connection with the unit for which the incentive is sought or for any other unit / activity with which concerned promoter is directly or indirectly associated.

14.4 The industrial units established in the following Districts – Kalahandi, Nuapada, Bolangir, Sonepur, Koraput, Malkangiri, Rayagada, Nawarangpur, Gajapati and Deogarh will get additional interest subsidy @ 5% of the term loan or Rs. 5.00 lakh whichever is less as an incentive for backward area development.

 SALES TAX :

15.1 In pursuance of the decision taken by all States and Union Territories regarding reforms in sales tax, Government have decided that no fresh sales tax incentives will be extended to industrial units in the State.

15.2 The State Government is committed to reforms in Sales Tax administration with the objective of switching over to the harmonized Value Added Tax (VAT) system effective from 1st of April 2002. VAT system will provide for a full set-off of ‘tax paid on inputs for manufacturing’ to ensure greater competitiveness of the local industries.

15.3 The industrial units enjoying or eligible for the benefits under IPR’89 and pre-89 IPRs will not get sales tax incentives after 31.7.99 as per F.D., S.R.O No.622/99 dated 30.7.99, S.R.O. No.623/99 dated 30.7.99, S.R.O No.624/99 dated 30.7.99 and S.R.O No. 625/99 dated 30.7.99. However, industrial units enjoying benefits under I.P.R’92 and I.P.R’96 as on 1.1.2000 will continue to get sales tax incentives for the period they are entitled under the respective policies.

15.4 Industrial units which are in pipeline as on the Ist January, 2000 shall entitle to the incentives under said notification with same terms and conditions as applicable to them, if they fulfil the following criteria as on the Ist January, 2000, namely -

Industrial unit which is registered under Orissa Sales Tax Act, 1947.

Industrial unit which has been allotted land for the factory or the industrial unit which has acquired land or space for its operation.

Industrial Unit which has applied for finance from regular Financial Institution.

Industrial unit which will start commercial production before the Ist January, 2002.

15.5 Industrial units will be eligible for concessional rate of Central Sales Tax for Inter State sale to registered dealers as per Finance Department notifications issued from time to time.

15.6 Exemption of sales tax on finished products of khadi, village, cottage and handicraft industrial units. Finished products of all existing and new khadi, village, cottage and handicrafts industrial units will be exempted from sales tax when sold at sales outlets of authorised Cooperatives/Government agencies and agencies recognised by Khadi and Village Industries Commission/Board, Coir Board, Handicraft Corporation and DIC.

15.7 100% export oriented units will be allowed refund of OST on inputs and raw materials used for manufacture of good for export subject to proper proof of exports.

15.8 Industries Department on the recommendation of Financial Institutions/Banks will declare sick units to be eligible for concessional rate of CST on merit of the case subject to concurrence of Finance Department.

 PATENT REGISTRATION :

Industrial units will be encouraged for filing patent of their research and State will provide assistance to entrepreneurs for Patent and Intellectual Property Right (IPR) provisions @ 50% of the expenditure up to maximum of Rs.5.00 lakh.

 QUALITY CERTIFICATION :

High priority is being accorded by the State Government for improvement of quality of the industrial units and will be provided with assistance for obtaining quality certification from B.I.S and other internationally recognized Institutions @ 50% of the expenditure up to maximum of Rs. 2.00 lakh. 

 LAND :

18.1 Government land earmarked for industry under the "Land Bank" scheme and other Government land wherever available will be allotted for industrial projects.

18.2 "For the purpose of rates of Government land, different areas of the State have been divided into the following zones.

Zone A - Revenue Sub-divisions of Angul, Balasore, Bargarh, Berhampur, Bhubaneswar, Champua, Cuttack, Jajpur, Jharsuguda, Panposh, Rayagada, Sambalpur, Talcher and Paradeep NAC area.
Zone B - All Revenue Sub-divisions of the State except those covered under Zone-A"

18.3 "Government land earmarked for the Land Bank Scheme and other Government land wherever available will be allotted for new industrial projects at pre-determined rates as notified from time to time. The following rates for Government land shall apply until further orders:-

Category

Rate for land located within Municipal/NAC Area    (Per Acre) (Rs.)

Rate of Land located outside Municipal/NAC Area (Per acre) Rs.

Ground Rent

Zone-A 3,00,000 1,00,000 1% of the Land Value
Zone-B 1,00,000      25,000    1% of the Land Value

(Ammended vide Resolution No.2020/I, dated 28.1.2003)

18.4 New units and existing industrial units taking up modernization will be granted exemption under the provisions of clause (c) of section 73 of Orissa Land Reforms Act, 1960 from payment of premium, leviable under provisions of clause (c) of section
8(A) of the OLR Act, 1960, on production of eligibility certificate from the Director of Industries for large and medium industries and G.M., DIC, for small and tiny industries.

18.5 Tourism, Information Technology (IT) and Biotechnology related units as well as Technology Laboratories may be allowed in the urban areas irrespective of the earmarked use in the current master plan in operation. Similarly, Floor Area Ratio may also be relaxed.

18.6 The Industrial Estates, Industrial Areas, Industrial Parks, Growth Centres etc. shall be excluded from the tax regime of the Municipal and other local authorities for management by the local industries’ associations, provided that the latter undertake to maintain the infrastructure of the industrial estates either directly or through other agencies by taking consent of H & U.D. Department to amend the concerned Act.

POWER :

18.7 New industrial units with contract demand up to 100 KVA will be exempted from the payment of electricity duty for a period of 5 years from the date of availing power supply for commercial production.

18.8 A power plant generating power from non-conventional sources set up after the effective date shall be deemed to be a new industrial unit and will be entitled to all the incentives under this policy. These plants will not be liable to pay electricity duty.

18.9 Industries of seasonal nature like Sugar, Salt Industries etc. will be provided the facility of temporary surrender of a part of their connected/sanctioned load. This facility will be made available on the recommendation of the committee constituted for this purpose.

18.10 If any industrial unit sets up captive power plant, it will be allowed 3rd party sale if it has surplus power available, the unit will be free to sell its surplus power to GRIDCO or to any other industry requiring the same directly as per the guidelines prescribed by OERC.

18.10(A) "Captive Power Plants in respect of which fixed capital investment has commenced within the effective period of IPR-2001 will be entitled to exemption of Electricity Duty (E.D) payable for a period of 5 years from the date of commissioning of the plant.

Provided that no such exemption from the payment of electricity duty is available in respect of power sold/supplied to the users other than the industrial units to which power plant is captive." 
(Ammended vide Industries Department Resolution no.6363/I dt.7.4.03)

18.11 Information Technology, Bio-technology and Tourism related activities (existing or new) which are treated as industrial activity will be entitled to have power at industrial and not commercial rate of tariff subject to OERC approval.

 WATER :

19.1 In case of drawal of water by a new industrial unit from any Government water source as defined in clause-6 (a) of Section-4 of the Orissa Irrigation (Amendment) Act, 1993(Orissa Act 3 of 1994), water charge will be payable in the manner as indicated below:

(i) At 50% of the rates prescribed for the purpose under the provisions of the Irrigation Act for a period of five years.

(ii) Thereafter, at full prescribed rates.

19.2 In respect of water to be drawn by a new industrial unit from any existing Government controlled irrigation source, water charges at the prescribed rate will be payable from the date of commercial production as indicated below.

(i) At 75% of the rate prescribed for the purpose for drawal of water from such Government controlled irrigation source for a period of three years.

(ii) Thereafter at full prescribed rates:

Provided that where an industrial unit makes financial contribution for creation/completion of the irrigation source, no water charge will be payable at the rates stipulated in sub-para (i) & (ii) till full adjustment of the amount contributed by the industrial unit in question for creation/completion of the irrigation sources.

STAMP DUTY :

20.1 No stamp duty will be required to be paid in respect of land allotted by the Government to IDCO. But stamp duty @ 5% will be required to be paid in respect of transfer of land/shed by Government and IDCO to industrial units. This will also be applicable in respect of private land acquired by IDCO, which is subsequently allotted to industrial units.

20.2 In respect of land acquired by the Government and subsequently transferred or allotted to industrial units, stamp duty @ 5% will be required to be paid.

20.3 Stamp duty will be exempted for units required to be transferred to a new owner/management under the provisions of the State Financial Corporation Act, 1951 or on the recommendation of the State Level Inter Institutional Committee (SLIIC) or the State Level Nodal Committee, as the case may be.

20.4 Stamp duty will be exempted for units under proprietary /partnership firms to be converted to companies for rehabilitation on the recommendation of SLIIC or otherwise on the recommendation of IPICOL/OSFC/Director of Industries.