ISMPSSSGST

Incentive Scheme for MSMEs in Powerloom Sector: Subsidy for State Goods and Services Tax (SGST)

“Subsidy for State Goods and Services Tax (SGST)” incentive under the “Incentive Scheme for MSMEs in Powerloom Sector” scheme implemented by the Dept. of MSME & T, Government of West Bengal, aims to provide refund of Net SGST paid to the Government of West Bengal for its approved project.

State Cash

States / UT: West Bengal

Nodal department: Micro, Small & Medium Enterprises and Textiles Department

Scheme for: Infra

Scheme profile

DBT (direct benefit transfer): No

Scheme open date: 2022-01-01

Categories: Business & Entrepreneurship

Sub-categories: Setting up / start-up / entrepreneurship

Target beneficiaries: Business Entity, Industries, Joint Liability Groups (JLGS), NGO, Registered Societies, Government Organisation, Self Help Groups (SHGS), Trust

Tags: Powerloom, Waiver, State Goods And Services Tax, Entrepreneurship, Subsidy, Reimbursement, GST, SGST

Details

The scheme “Subsidy for State Goods and Services Tax (SGST)” is a sub scheme under the “Incentive Scheme for MSMEs in Powerloom Sector”. It was launched on 1st January, 2022, by the Department of Micro, Small & Medium Enterprises and Textiles, Government of West Bengal, and shall remain valid upto 31st December, 2024.

Objective of the "Incentive Scheme for MSMEs in Powerloom Sector”:

The objective of the Scheme is to extend fiscal incentives for installation of New age shuttleless Powerlooms by MSMEs in Textile sector with a view to boost production of the improved quality fabrics and to create a sustainable ecosystem for MSMEs in Textile sector which can maximize the utilization of resource, generate new employment and widen the area of operation to make the State emerge as the leader in Powerloom sector in country.

Objective of the "Subsidy for State Goods and Services Tax (SGST)" Sub-scheme:

Through this incentive, an eligible micro, small and medium enterprise in the Powerloom sector for its approved project will be entitled to refund of Net SGST paid to the Government of West Bengal for 8 years from the date of commencement of commercial production.

Benefits

  • Zone B & C: 30% of Net SGST paid for 8 years from the date of commencement of commercial production. Zone D & E: 50% of Net SGST paid for 8 years from the date of commencement of commercial production. Note: Cumulative refund of SGST shall not exceed 75% of Fixed Capital Investment

Zone B & C: 30% of Net SGST paid for 8 years from the date of commencement of commercial production.
Zone D & E: 50% of Net SGST paid for 8 years from the date of commencement of commercial production.

Note: Cumulative refund of SGST shall not exceed 75% of Fixed Capital Investment.

Eligibility

  • The Scheme shall be generally applicable to all micro, small, and medium enterprises (MSMEs) in the powerloom sector.
  • Enterprises must have started production from 01.01.2022 to 31.12.2024.
  • Enterprises should have executed a Four-party agreement with the Directorate of Textiles, Financial institution and Tantuja.
  • The units should be a private sector, cooperative sector and joint sector undertaking as also companies/ undertakings owned and managed by the State Government and the Industrial SHGs.
  • The project should be covered by a detailed feasibility report/project prepared for the purpose.
  • The project should have been approved and sanctioned by a Central Financial Institution or Commercial Banks or State Financial Institutions.

Exclusions

  • Enterprises registered and for which eligibility certificates have been issued/ incentives have been sanctioned and/ or disbursed under the respective Incentive Scheme of the State.
  • Enterprises registered and for which eligibility certificate have been issued in terms of the respective Incentive Scheme of the State but no sanction or disbursement of incentive has been made.
  • Enterprises commenced production before 31.12.2021 and applied for incentive under the respective Incentive Scheme of the State within the stipulated date (The claim will be governed by the respective Incentive Scheme of the State).

Application Process

Offline

  • An eligible enterprise shall apply in prescribed format in FORM-E to the Commissioner of Commercial Taxes, West Bengal at the close of each year requesting him to certify the total amount of SGST paid (excluding input credit) by it in respect of goods manufactured and sold during the year in respect of which the application has been made.

Time frame for submission of first Application:

Within 12 months from the date of commencement of commercial production (01.01.2022 to 31.12.2024).

Address:

THE COMMISSIONER, COMMERCIAL TAXES, DIRECTORATE OF COMMERCIAL TAXES 14, BELIAGHATA ROAD, KOLKATA-700015

Clarifications

Additional points from the scheme information published on myScheme (not legal advice).

What areas are classified under “Zone A” for the purpose of determining incentives?
"Zone A" includes Kolkata Municipal Corporation Area, All municipal areas of North 24- Parganas, All municipal areas of South 24-Parganas, All municipal Corporation and municipal areas of Howrah.
Which districts fall under “Zone B” for incentive classification?
"Zone B" comprises Districts of Hooghly, North 24 Parganas (excluding municipal areas and Sundarban areas), South 24 Parganas (excluding municipal areas and Sundarban areas), Howrah(excluding corporation and municipal areas), Siliguri Municipal Corporation, Municipal Corporations / Municipal Areas of Paschim Medinipur, Purba Medinipur, Purba Bardhaman, Paschim Bardhaman and Nadia.
What is the primary eligibility criteria for incentives under the “Incentive Scheme for MSMEs in Powerloom Sector”?
The scheme shall generally be applicable to all micro, small and medium enterprises in the powerloom sector which have started production on or after 1st day of January, 2022 and have executed a Four-party agreement between the enterprise, Tantuja, Directorate of Textiles & Financial institution .Terms and conditions as a part of this agreement will be prescribed by the Department of MSME & T, WB in due course of implementation of the scheme.
How should an enterprise maintain its accounts to ensure it can clearly show the amount of SGST paid (excluding input credit) for sales of items manufactured under an approved project, in order to qualify for this sub-scheme?
The enterprise shall maintain the accounts in such a manner that at any time as may be necessary it can show clearly the amount of SGST paid (excluding input credit) in respect of sales made by it of the item(s) manufactured as per approved project to which it is entitled to refund of SGST paid (excluding input credit) under Incentive Scheme for MSMEs in Powerloom Sector.
How does the Directorate of Textile scrutinize and conduct physical inspection of the enterprise upon receiving its application for incentives?
On receipt of application for incentive from an enterprise the Directorate of Textile shall make, as expeditiously as possible and not later than 15 days, scrutiny of/ enquiry into particulars furnished by the enterprise and cause physical inspection of the enterprise through the Officers of the Directorate to ascertain Fixed Capital Investment proposed to be made in Plant and Machinery (new age shuttle less loom) by it.
What is the procedure for claiming the Subsidy?
Enterprises need to apply for the subsidy along with the required documents to the designated authorities as per the guidelines provided by the concerned department or agency.
What is the significance of the classification of areas into different zones for the scheme?
The classification helps in determining the quantum of incentives available for projects based on their location, with higher incentives provided for projects in backward areas.
Would an eligible enterprise that has availed of incentives or subsidies under any other state government incentive scheme be eligible for benefits under the Incentive Scheme for MSMEs in the Powerloom Sector for other specified items?
Yes, an eligible enterprise which has availed of incentive/ subsidy in respect of any of the items specified under any other Incentive of State Govt. shall also be eligible to get the benefits of other items only under Incentive Scheme for MSMEs in Powerloom Sector subject to fulfillment of terms and conditions of the Scheme.
How does the Directorate of Textiles determine the eligibility of enterprises for projects financed from their own resources?
In case of projects with arrangement of finance from own resources, eligibility of the enterprise shall be considered by the Directorate of Textiles according to the declaration of the enterprise regarding source of finance supported by a certificate issued by a Chartered Accountant as per Annexure-VI provided the Directorate of Textiles is satisfied about the technical specification of the machineries installed and the arrangement of such finance.
What is an “Approved project”?
"Approved Project" means the industrial project of a unit/ an expansion unit in the Powerloom sector which should be approved before implementation of the project in two steps - the technical part of the project should be approved before implementation of the project by the Directorate of Textile under the Deptt. of Micro, Small & Medium Enterprises and Textiles, Govt. of West Bengal and subsequently should be approved for its financial part by any commercial Banks/ Financial Institution (Central and State)/ Cooperative Banks/ scheduled banks approved by RBI/ RRBs financing the project.
What measures are in place to prevent misuse of the subsidy scheme?
Strict guidelines, documentation requirements, and verification procedures are in place to ensure that subsidies are availed by eligible enterprises for genuine purposes only.
What action will the Directorate of Textile take if an application is determined to be ineligible for incentives under the Incentive Scheme for MSMEs in the Powerloom Sector?
If any application is found to be not eligible for incentives under the Incentive Scheme for MSMEs in Powerloom Sector, Directorate of Textile will issue a letter of rejection to the applicant enterprise.

Definitions

  • Zone-A
  • Zone-B
  • Zone-C
  • Zone-D

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Documents Required for Government Schemes

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