ANNOUNCED AS TEMPORARYNo
Tax or social insurance relief
On 5 December 2013, the State of Punjab in India announced the 'Fiscal Incentives for Industrial Promotion-2013' to facilitate the development of industry in the state.
The following industries or firms benefit from the scheme: Large manufacturing units (i.e. with fixed investment greater than INR 250 million), small and medium units (i.e. with fixed investment greater than INR 100 million), integrated textile units, electronics hardware and IT industry, agro-related businesses, tourism sector, and health sector.
Amongst a variety of tax and regulatory incentives, the Promotion includes various trade-related incentives. For the agro and food processing sector, the plan promises subsidies on domestic distant marketing and on exports of flowers, fruits and vegetables and on imports of planting material, financial assistance on patent registration, subsidies on purchase of farm equipments, assistance to research, and exemptions from food retailing contributions. Furthermore, companies using products with greater Indian value addition are given preference in public procurement.
The genreal tax and regulatory incentices are summarized as follows. Each firm type and/or industry is subject to different incentives. The following incentives are generally applicable: Exemptions from payment of value added tax (VAT) and central service tax (CST), electricity duty on power, stamp duty levied on purchase/lease of land, property tax, market fee, rural development fund and infrastructure development cess.
Specific additonal Incentives for the electronics hardware and IT industry include: Exemptions in clearances from the pollution control board, inspections under various labour laws, and under Punjab apartment and property regulation act. Furthermore, firms in these industries (i) receive preferential market access for government purchases, (ii) benefit from a separate investment subsidy package for semi-conductor wafer fab capital outlay and (iii) costs for the filing of patents are subsidised.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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