Section 5 in Industrial Development Scheme for Jammu and Kashmir, 2017
5. Definitions.
(a)"Commencement of Commercial Production" means starting of manufacture of finished products on commercial scale which is preceded by trial production and installation of complete plant and machinery and on that day the plant must be ready in all respects for manufacture of finished products in commercial quantity and all raw materials, consumables, etc. required for manufacture are available and as per date of registration with Central Excise/Goods and Services Tax (GST) authorities.(b)"Effective steps" means one or more of the following steps:-(i)that 10% or more of the capital issued for the industrial unit has been paid up.(ii)that any part of the factory building has been constructed.(iii)that a firm order has been placed for any plant and machinery required for the industrial unit.(c)"Finished Goods" means the goods actually produced by an industrial unit and for which it is registered.(d)"Industrial Unit" means any industrial undertaking or eligible service sector unit, other than that run departmentally by Government, which is a registered business enterprise under Goods & Services Tax.(e)"Manufacturing Activity" means 'an activity which brings about a change in non-living physical object or article or thing (i) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or (ii) bringing into existence of a new and distinct object, article or thing with a different chemical composition or integral structure.(f)"Eligible Service Sector Unit" is an enterprise in the services sector that requires significant capital expenditure and has significant employment generation potential.(g)"New industrial unit" means an industrial unit which registers itself on DIPP portal on or after the 15th day of June, 2017 but not later than 31st day of March, 2022. Such units have to commence commercial production/ operation within 18 months of registration.(h)"Existing Industrial unit" means an industrial unit which commences commercial production/ operation before 15.06.2017.(i)"Substantial expansion" means increase by not less than 25% in the value of fixed capital investment in Plant & Machinery of an industrial unit for the purpose of expansion of capacity / modernization and diversification.(j)"Physical Working Capital" is defined to include all physical inventories owned, held or controlled by the factory as on the closing day of the accounting year such as the materials, fuels & lubricants, stores etc., that enter into products manufactured by the factory itself or supplied by the factory to other for processing. Physical working capital also includes the stock of materials, fuels & stores etc., purchased expressly for re-sale, semi-finished goods and work in progress on account of others and goods made by the factory which are ready for sale at the end of the accounting year. However, it does not include the stock of the materials, fuels, stores etc. supplied by others to the factory for processing. Finished goods processed by others from raw materials supplied by the factory and held by them are included and finished goods processed by the factory from raw materials supplied by others are excluded.(k)"Raw Material" means any raw material actually required and used by an industrial unit in manufacturing of the finished goods for which it is requested.(l)"Working Capital" is the sum total of the physical working capital as defined in Para (j) above and the cash deposits in hand and at bank and the net balance of amounts receivable over amounts payable at the end of the accounting year.Working capital, however, excludes unused overdraft facility, fixed deposits irrespective of duration, advances for acquisition of fixed assets, loans and advances by proprietors and partners irrespective of their purpose and duration, long term loans including interest thereon and investments.(m)"Plant and Machinery" shall cover the cost of newly purchased industrial plant and machinery as erected at site. Relocated / Recycled / Refurbished plant and machinery is not eligible for assistance under the Scheme. Components to be included / excluded for the purpose of scheme and for a manufacturing unit is at Annexure II. The purchase of machinery should be from open market at normal market price. It will be ascertained whether the purchase has been made from a Related Party without following an arms-length price discovery.
