Punjab Govt decides to amend industrial policy to give investment incentive on intrastate sale
In a bid to boost industrial development in the state, the Punjab Government has decided to amend the Industrial and Business Development Policy 2017 to give investment incentive by way of Net SGST on intrastate sale.
The decision was taken at a meeting of the Cabinet, chaired by Chief Minister Captain Amarinder Singh.
The Cabinet noted that since the government could not give direct concessions to industry in matters of land acquisition etc, other incentives should be provided through amendment to the policy so that both the state and the industry get the best deal through measures such as global tendering.
The Cabinet observed that for effective implementation of the policy there was need to explicitly define and explain the term `Net SGST Incentive’. A series of meetings/consultations were held amongst departments of Excise & Taxation, Finance, Industries & Commerce and Investment Promotion. After deliberations, a detailed formula for different eventualities was finalized in the meeting under the chairmanship of the Finance Minister.
According to the new formula, incentive amount would be calculated based on output IGST (or CGST+SGST), that would be called GST rate for formula. Overall quantum and/or period for claim of incentives shall remain same as defined in IBDP-2017 (as amended from time to time) for the respective category. Availing of incentives up to the overall ceiling i.e. 200%/125%/100% of FCI, as applicable, shall depend on the capacity utilization of the unit during the eligibility period.
The incentive under the present policy would only be applicable for such investment proposals where Common Application Form has been submitted by March 31, 2020.
The spokesperson said that this formula would be subject to various conditions. In the case of a unit with multiple outputs having more than one GST rate, the incentive amount shall be calculated pro rata to the respective sales (value as defined in GST law) of eligible outputs.
If the amount calculated as above is less than 2.5% of the FCI in any particular year, the unit will be entitled to get such difference as the additional amount of incentive, subject to the fact that it has been able to achieve sales of three times of the FCI. For example, if the GST incentive for a unit with FCI worth Rs 100 cr and sales of Rs 310 cr in a FY comes to Rs 1 crore in the FY, the unit shall be able to get an additional amount of Rs 1.5 cr as incentive. The unit operating for a part of the year of the incentive period will get the amount on pro rata basis, with the requirement of sales being three times of FCI also applying on a pro rata basis.