Rajasthan Investment Promotion Scheme, 2019: An opportunity for aspiring Entrepreneurs

The Government of India as well as all the State Government are giving tremendous focus on industrial growth and are therefore promoting set up of new industrial units and expansion of existing units. The sole objective behind the above goal is generating opportunities for employment and bringing prosperity to the nation. In the recent past, the State of Rajasthan has also seen rapid industrial growth especially in the region attached to Delhi-NCR namely Alwar, Bhiwadi, Khuskheda, Neemrana etc. This is because of continuous efforts put in by the Government of Rajasthan to attract investments from aspiring industrialists. The State of Rajasthan is highly attractive from the point of view of investment in industrial sector because of many factors such as cheaper land bank, availability of low-cost labour, low power cut, abundance of minerals like zinc, copper etc. and most importantly the investor friendly outlook of State Government.

Rajasthan Investment Promotion Scheme, 2019

In order to generate employment opportunities and promote rapid, sustainable and balanced economic growth in Rajasthan, The Rajasthan Government came out with a policy framework “The Rajasthan Investment Promotion Scheme, 2019” also known as RIPS, 2019. The scheme is intended to provide several benefits to new industrial units and existing units undergoing expansion. However, the benefits of RIPS, 2019 shall be available only to eligible units from manufacturing sector and service sector. In this article, we are providing some basic details of the scheme. For better understanding you can also follow the video link attached to this article.

Who is eligible to get benefit under RIPS, 2019?

The benefits under RIPS, 2019 will be applicable to the following classes of enterprises and investments:

• New and existing enterprises making investment for setting up new units
• Existing enterprise making investment for expansion

However, one important condition is required to be fulfilled that the enterprise intended to get benefits under the scheme shall have to commence commercial production or operations during the operative period of the scheme.

What is the operative period of RIPS, 2019?

• The scheme provides that the benefit under RIPS, 2019 can be availed only where the eligible units commence the commercial production or operations within the operative period of the scheme. So, a question comes to our mind as to “What is the operative period of RIPS, 2019”
• To make this question clear, it is to be noted that the operative period of the scheme is 17-12-2019 to 31-03-2026. Thus, it means that the intending entrepreneur will have to commence production or operations within the above time period to get subsidy and other benefits under the RIPS, 2019.
• The RIPS, 2019 shall not be applicable to a unit or enterprise if its commercial production or operation has commenced before the issuance of the order for RIPS, 2019 or an entitlement certificate has been issued to provide any exemption or benefit under Rajasthan Investment Promotion Scheme-2014 or Rajasthan Investment Promotion Scheme- 2010 or Rajasthan Investment Promotion Scheme-2003.

Who is not eligible to get benefits under RIPS, 2019?

The following industries or units are not eligible to get benefits under RIPS, 2019 as per List-1 as below:

• Investment for manufacturing tobacco, tobacco products and Pan Masala
• Investment in Cow Beef Processing units
• Investment in retail/ trading activities
• Any activity prohibited by Central/ State laws

Which sectors will be benefitted by the RIPS, 2019?

The RIPS, 2019 is intended to benefit the following areas or sectors:

• Manufacturing Enterprises
• Manufacturing Enterprises in Thrust Sectors
• Service Enterprises
• Service Enterprises in Thrust Sectors
• Enterprises in backward and most backward areas

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What are the major benefits under RIPS, 2019?

An eligible enterprise under the RIPS, 2019 shall get the following benefits and incentives as given below:

• Investment Subsidy in the form of 75% of SGST due and deposited for 7 years
• Employment Generation Subsidy in the form of reimbursement of 50% of employers’ contribution towards employees ESI and PF for 7 years
• Exemption from payment of 100% of electricity duty for 7 years
• Exemption from payment of 100% of Land Tax for 7 years
• Exemption from payment of 100% of market fee (mandi fee) for 7 years
• Exemption from payment of 100% of stamp duty
• Exemption from payment of 100% of conversion charges for change of land use and conversion of land
• In addition, the eligible enterprise shall also be provided interest subsidy or capital subsidy for the capital investment made by them in the new unit or expansion of existing unit. Interest subsidy or capital subsidy may vary in various sectors and depends on the fulfilment of eligibility criteria sector-wise.

RIPS 2019 Registration online

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What are conditions for interest subsidy under RIPS, 2019?

• The interest subsidy shall be in addition to any other incentive available under any other scheme of Government of India. The enterprise availing the incentives or subsidy under any other package/ scheme of State Government shall not be eligible for availing benefit under the Scheme.
• The interest subsidy shall be allowed on the term loan taken from State Financial Institutions/ Financial Institution/ Bank recognized by RBI for making an investment in plant & machinery and/or equipment or apparatus.
• The interest subsidy shall be available only for interest levied by the Financial Institution/ Bank. Penal interest or other charges shall not be reimbursed.
• The interest subsidy shall be allowed for a period as mentioned in eligibility certificate or up to the period of repayment of the loan. However, in case of transfer of such loan to other State Financial Institutions/ Financial Institution/ Bank recognized by RBI, the benefit may be allowed for the remaining period after the approval of appropriate screening committee.
• The interest subsidy shall be given to the enterprise which pays regular instalments and interest to the Financial Institution/ Bank. If the enterprise becomes a defaulter, it will not get interest subsidy for the default period and such defaulting period will be deducted from 5 years period as mentioned in the eligibility certificate.
• The interest certificate shall be allowed only in a case where the enterprise is engaged in manufacturing or service rendering as the case may be in the period in which interest subsidy is claimed except where it is engaged in manufacturing of seasonal goods or rendering of service activity.

What are the conditions for capital subsidy under RIPS, 2019?

• The maximum limit of capital subsidy shall be as approved by the appropriate Screening Committee and mentioned in the eligibility certificate.
• The eligible Capital Subsidy shall be disbursed in 2 equal instalments
• The Capital Subsidy shall be allowed only in a case where the enterprise is engaged in manufacturing or service rendering, as the case may be, in the period in which the capital subsidy is claimed except where it is engaged in manufacturing of seasonal goods or rendering of service activity.

For detailed Scheme click on the following link: Rajasthan Investment Promotion Scheme, 2019

Disclaimer: The article is intended for informative purposes only. Readers are requested to act diligently while applying the above information. Taxwink is not available for any loss or damage caused to any person on the basis of above information. Contact 09660930417 for further assistance.