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State of Bihar - Section

Section 2 in Bihar industrial Incentive Policy, 2006

2. Post-Production Incentive.

(i)Project-report Incentive. - Reimbursement of the cost incurred in the project report preparation by the industrial units at the rate of 50% subject to a maximum of Rs. 75,000/- will be made available, provided, the project report is prepared by any of the firms recognised by the Industry Department. The reimbursement will be made to the unit after commencement of the production.
(ii)Incentive granted on land/Shed. - The Industrial Units located in Bihar Industrial Area Development Authority/Export Promotion Industrial Park/Food Park/Agri Export Zone would be eligible for the following incentive/subsidy. These facilities/concession to the industrial units will be made available only after the commencement of production.
S. No. Industry Grant
1. Small/Tiny units Financial Limit. 50% or 7.50 lacs (maximum)
2. All large/medium/mega units Financial Unit 25% or 15.00 lacs (maximum)
(ii)Financial assistance for Technical-know-how. - If an entrepreneur obtains Technical Know-how from any recognised National research centre/laboratory or institution to establish or to expand his industry he will be reimbursed 30% (maximum Rs. 15.00 lacks) of the fee paid to the institution/organization for the technical know-how. This facility will be provided to the unit after commencement of production.
(iv)Incentive Grant for capital investment on Captive Power Generation/Diesel Generating Set. - 50% (Fifty per cent) of the amount spent on plant and machinery in the establishment of Captive Power Generation/Diesel Generating set will be granted to the industry. No upper limit for this amount has been fixed. This facility will be made available after the unit comes into production.
(v)New industrial units will be granted relief from payment of electricity duty under the Bihar Electricity Duty Act 1948 for the generation and for own consumption of electricity from D. G. Set and Captive Power Units.
(vi)Subsidy/Incentive on VAT. - This facility will be available to small/ large/medium industries. The industrial unit will get a passbook from the State Government in which the details to the tax paid under Bihar VAT would be entered and verified by the Commercial Taxes Department in the form prescribed in Appendix-III. The Director, Industries will be authorised to pay the incentive amount on the basis of the verification.
The new Units will avail 80% reimbursement against the admitted VAT amount deposited in the account of the Government, for a period of ten years. The maximum Subsidy amount is payable 300% of the capital Invested.Clarification: The incentive would not be payable on the amounts imposed as penalty and the difference of amount between tax assessed and accepted under the Central Sales Tax/Bihar Value Added Tax Act 2005 and Bihar Entry Tax Act.
(vii)Zero Vat: Zero VAT means the production of items, which do not attract VAT. Such units which produce items attracting zero Vat and pay income tax would be eligible for incentive upto a maximum utilization of 70% of the installed capacity (maximum limit) as per para (vi) above. Incentive will be payable after the inspection/ recommendation by a committee constituted under the chairmanship of the Director Industries on the basis of inspection and recommendation by technical officer of the Department.
(viii)In addition to aforesaid subsidy/concessions, the following exemptions will be provided:
(a)100% exemption for seven years in luxury tax for seven years.
(b)100% exemption in electricity duty for seven years.
(c)100% exemption in conversion charge.
(d)100% exemption in market Fee for seven years.
(ix)Facilities granted for the units working under adverse situation. - Working units which have been working under adverse situation for years will be reimbursed 25 per cent of the deposited VAT amount in the account of State Government against admitted VAT amount. This reimbursement will be admissible for five years continuously.
(x)Industrial Rehabilitation Fund. - A corpus fund will be created in order to revive the sick and closed industry with the co-operation of Commercial Banks, the State Government and Bihar Industries Association.
(xi)S.C./S.T./Women/Handicapped. -
(a)Under this category, entrepreneurs will avail 5% additional grant/exemption/subsidy over the limit fixed under this policy.
(b)Up to a turnover limit of Rs. 30 lakhs per annum S.C./S.T./ Women/Handicapped category entrepreneurs who run small and tiny industries will avail 100% subsidy of the deposited amount in the account of Government in the form of VAT for a period of ten years.
(xii)Exemption from AMG/MMG. - Working units at present and new units will avail exemption from AMG/MMG from the date of declaration of the New Industrial Policy. This facility will be granted for five years.
(xiii)Central Sales Tax (CST). - Only 1% CST will be payable on the items produced by the registered small and medium units in Bihar.