INDUSTRIAL POLICY & PACKAGE SCHEME OF INCENTIVES

• Objectives of the Industrial Policy
• Criteria for Eligibility
• Incentives for Large and Medium Scale Industries
• Other Tax Incentives & Concessions
• Transport Subsidy

With a view to take advantage of the liberalised economic scenario in the country, and also to keep pace with development in the National Industrial Sector, the Government of Meghalaya has framed "The Industry Policy, 1997" specifying the objectives and identifying the thrust areas and declaring a package of subsidies, incentives and assistance to the industries under "The Meghalaya Incentives Scheme, 1997".

OBJECTIVES OF THE INDUSTRIAL POLICY

The objectives of the new Industrial Policy are as follows:

Generate employment opportunities for the local people in the industries and allied sectors.

Develop human resources and bring about improvements in the quality of life by promoting industries in sectors where the state has comparative advantage

Achieve a balanced growth oriented development covering the entire state through promotion of village and small-scale industries.

Create a conducive environment for industrial development by creation of the basic infrastructural facilities and by setting up of industrial areas, growth centre and export promotion industrial park.

Encourage the setting up of selective medium and large industries by utilising the resource base of the state thereby ensuring sustainable industrial growth but compatible with ecological imperatives and hence encourage positive efforts towards the regeneration of the environment.

Provide preference to local Entrepreneurship in setting up of large, medium and small-scale units.

Promote local interest through Joint Ventures with external investors so as to facilitate technology transfer and capital flow by a package of suitable incentives.

Encourage need-based development of local entrepreneurial skills through intensive motivation and training programmes at district, sub-divisional and block levels

Provide guidance to prospective entrepreneurs by building up a data bank of project-profiles and other connected information.

Simplify rules and procedures by providing a single-window clearance facility at the District Levels for the small-scale sector and at the State Level for medium and large-scale industries.

Promote the setting up of ancillary units for catering to the requirements of large and medium scale industries.

Identify sick units that can be made viable and provide a comprehensive package of assistance for their revival.

Promote and encourage high-value, low-volume products, in view of the transportation-bottlenecks in the State.

Encourage setting up of Export-oriented, Agro-based, Mineral-based, Horticulture-based and Electronic units as thrust area.

CRITERIA FOR ELIGIBILITY

The incentive Scheme under the State Industrial Policy shall remain in operation for a period of five years commencing from 15th August 1997 or till such time as the State Government may deem fit. The State Government may also amend the Scheme from time to time without affecting incentive commitments already made.

Incentives will be available to new Units set up on or after 15th August 1997 or existing Units undertaking expansion, modernisation or diversification at the same location. The Units may be in the private sector, assisted sector, joint sector, state public sector or co-operative sector, Additionally, the work-force in such Units should include a fair proportion of local populace to be eligible for the incentives offered.

INCENTIVES FOR LARGE AND MEDIUM SCALE INDUSTRIES

For large and medium scale industries, there are subsidies like capital investment subsidy, interest subsidy, power subsidy, subsidy on cost of pollution/quality-control measures, special subsidy for pioneer units in backward areas etc.

Sales Tax exemption on sale of finished products for a period of seven years from the date of commercial production.

Exemption from the payment of applicable service tax (es) for seven years to a "Tourism Unit".

Reimbursement of Central Sales Tax (CST) paid on purchase of Capital Equipment installed till the date of project commissioning.

Partial exemption for applicable stamp duty.

OTHER TAX INCENTIVES & CONCESSIONS

Some of the other important fiscal incentives that are relevant for the reduction of the taxable income under certain conditions are as follows: -

Tax holiday for any five consecutive years of the first eight years to new ventures in Free-Trade Zones, Electronic hardware Technology parks and Software Technology parks.

Total exemption of profits for any five consecutive years of the first eight years derived by newly established 100% Export Oriented Units.

100% deduction of export profits allowed (subject to certain conditions) while calculating taxable income

100% tax holiday for the first five years and 30% tax holiday for the next five years for new industrial undertaking set up in Meghalaya, for generation (with/without distribution) of powers for developing, maintaining and operating any infrastructural facility.

Unabsorbed business losses can be carried forward for a maximum of eight years.

Unabsorbed depreciation and capital expenditure on scientific research can be carried forward indefinitely.

Inter-corporate dividends are exempt from tax to the extent the company distributes dividends to the shareholders.

TRANSPORT SUBSIDY

Applicability:

The scheme is applicable to all new Industrial Units (baring plantation, refineries and power generation units) for a period of 5 years from the date of commencement of commercial production.

Transport Subsidy Rate:

For raw materials imported from outside the North Eastern Region as well as outside the State but within North Eastern Region, the transport subsidy is 90%.

For finished goods sent to outside North Eastern Region the transport subsidy is 90%.

For finished goods sent to outside the State but within the North Eastern Region, the transport subsidy is 50%.

Validity:

The scheme after last extension is presently valid upto 31st March 2000.