High Priority Sectors
High Priority Sectors - Definition, Classification, Incentives
In order to establish Bihar as the most preferred investment destination by leveraging the state's comparative advantages and maximizing employment opportunities for attaining a balanced regional and sustainable development, Government of Bihar had announced the Bihar Industrial Investment Promotion Policy, 2016 vide notification No.1822, Dated 01.09.2017. Further, The Bihar Industrial Investment Promotion Act, 2016 and The Bihar Industrial Investment Promotion Rules, 2016 were also formulated to facilitate the investment in the State.
Based on the assessments of their economic and employment generation potential, it is however, realised that an increased focus is required on the three broad sectors namely- (1) IT, IT enabled Services (ITeS) and Electronic System Design and Manufacturing (ESDM) sector (2) Food Processing Sector and (3) Textile, Apparel and Leather sector.
These sectors are manpower intensive requiring huge skilled manpower and are based on the huge production potential for the diverse agricultural commodities in the State.
In order to promote accelerated investment in these three sectors the State Government has amended the Bihar Industrial Investment Promotion Policy 2016 for High Priority Sectors.
For ESDM, Textile & Leather SectorA unit in which (i) Investment in Fixed Asset and Plant and Machinery (excluding Land) is more than Rs 5 Crore, and (ii) creating direct employment of at least 50 core workers (excluding support staff such as Drivers, Guards etc.).
For IT and ITeS SectorA unit in which (i) Investment in Fixed Asset and Plant and Machinery (excluding Land) is more than Rs 5 Crore, and (ii) creating direct employment of at least 50 core workers (excluding support staff such as Drivers, Guards etc.).
For Food Processing SectorA unit in which investment in Fixed Asset and Plant and Machinery (excluding Land)is more than Rs 5 Crore
|Priority||As defined in the Bihar Industrial Investment Promotion Policy, 2016|
|Non-Priority||As defined in the Bihar Industrial Investment Promotion Policy, 2016|
State government is committed to encourage the process of industrialization by assuring an entrepreneur-friendly regime and an attractive package of incentives for the entrepreneurs. The following package of incentive will be made available to the high priority category of Industrial Units.
|Exemption from Stamp Duty/ Registration Fees|
a) No stamp duty to be paid in respect of land allotted by the government to IDA/ BIADA.
b) 100% exemption of stamp duty/registration fees levied on lease/ sale /transfer of industrial land/shed as also those outside the jurisdiction of Industrial Area Development Authority would be available to all the new units. This exemption of stamp duty and registration fees will be granted only for the first time and will not be applicable in subsequent stages of lease/sale/transfer. This incentive will be available to new units only.
c) The area of land required by the unit shall be fully described in the DPR and/or the Bank Appraisal Report prepared by the bank or financial institution which is supposed to extend the term loan to the unit.
|Land Conversion Fees||a) 100% exemption of “land conversion fees”/ “change in land use” fees being levied for conversion of agricultural land.|
|Tax Related Incentive||(a) All new units will be entitled to avail 100% reimbursement against the admitted SGST deposited in the account of the state government(excluding strictly any tax paid by them arising out of a purely trading business), for a period of 5 years from the date of commencement of commercial production. The SGST reimbursement shall be applicable only to the net tax payable, after adjustment of input tax credit against the output tax liability. This shall have a maximum limit of 100% of the approved project cost.|
|Employment Cost Subsidy||(a) For IT and ITES sector, ESDM, Leather and Textile sector and Food Processing, 50% reimbursement (in case of male workers) and 100% reimbursement (in case of female workers) of expenditure on account of contribution toward ESI and EPF scheme for a period of 5 years for new units for those employees who are domicile of Bihar. Maximum limit for reimbursement will be Rs. 1000/- per month for SC/ST and women employee and Rs. 500/- per month for general employee.|
|Skill Development Subsidy||(a) The State Government shall provide skill development subsidy of Rs 20,000 per employee/ Bihar Skill Development Mission (BSDM) rates whichever is lower. This incentive will be applicable for training of employees/ staffs who are domicile of Bihar (b) All the eligible unit will have to employ the trained core employee/ staff for a period of at least 1 year.|
The State Government shall also extend the Project Management Unit (PMU) support to the High Priority Sector Units. The State Government will set up an Investor Facilitation Cell cum PMU for investor facilitation. The Investor Facilitation Cell cum PMU for the IT, ITeS and ESDM sector shall be set up by the Department of Information Technology, Govt. of Bihar and the Investor Facilitation Cell cum PMU for the other two sectors shall be established by the Department of Industries, Govt. of Bihar. Some of the major responsibilities of the Investor Facilitation Cell cum PMU are mentioned below:
- Facilitating investment proposals and assisting entrepreneurs and investors in setting up their units in the State
- Facilitation to addressing of investors' query, grievance redressal and handholding entrepreneurs through the entire process of compliance to statutory obligations
- Disseminating information through mass media related to prospects of industries, prospective projects for investment, and statutory compliance requirements for setting up units etc.
- Organizing, sponsoring, associating or participating in any fair, exhibition, celebration or campaign for the promotion of investment in the High priority sectors
- Reviewing and assessing the performance of the State in the sectors in terms of number of units set up, persons employed, amount of investments drawn and value of production
- Deploying dedicated relationship officers for maintaining investor relationship in the State
This Amendment to the Bihar Industrial Investment Promotion Policy, 2016 for high Priority Sectors shall be an integral part of the Bihar Industrial Investment Promotion Policy, 2016. All other provisions, terms and conditions mentioned in the Bihar Industrial Investment Promotion Act-2016, Bihar Industrial Investment Promotion Rules-2016 and Bihar Industrial Investment Promotion Policy-2016 shall remain unaltered.
Following general conditions shall be applicable for availing the incentives under this policy:
- Dovetailing of incentives with the Central Government schemes would be allowed.
- Units those have availed benefits under this policy shall not be eligible to avail benefits for the same assets under any other policy/scheme of the State.
- Employees identified for State Government Projects or any of its undertakings and agencies cannot be considered for employment counting of a unit under this policy for the purpose of availing incentives in case the Company is implementing a project in the Government in which some resources are employed, the employed resources would not be eligible for the incentives. Any duplication in the counting of the employees for the purpose of availing incentive shall attract penalty as mentioned below in Section. 4(v). Tax related incentives shall not be available for projects related to the Government or any of its undertakings or agencies.
- To avail the incentives under this policy, units shall have to commence their commercial operation within 3 (three) years of Stage–I of Clearance. The unit has to be under commercial production during the period of disbursement of incentives. Further, the unit shall have to remain in commercial operation for at least next 5 years from the date of last disbursement of all the eligible incentives to it under the policy.
- If any false declaration is given for the purpose of availing incentives or if incentives are availed for a unit that was not eligible or any violation of condition of this policy, the amount of incentive is liable to be recovered from the date of availing such incentives along with interest compounded annually @ 18% per annum. In case of non-payment within the stipulated time, the state government may recover such amounts including interest as arrears of land revenue.
- For the purpose of this Policy:
- Employees shall mean those employees who are on regular roll of the company. Daily wage employees or seasonal employees shall not be entitled to this concession. The employee strength shall be calculated on the basis of the employees involved in the core activities of the project. This shall be certified by the statutory auditor of the company as a support to the claim for incentive. Core activity shall be defined as those activities that are part of the production process. Support staff shall not be counted towards the employee's strength.
- Domicile of the State of Bihar shall mean those who have been defined by the State Government from time to time as the original domiciles of Bihar and who hold the certificates issued for this purpose by the competent authority.