In a bid to woo industrialists, the Punjab Government, in its new industrial policy, has announced VAT and CST retention up to 80 per cent and sops for various industries.
Presenting the new policy passed by the Cabinet, Punjab Deputy Chief Minister Sukhbir Singh Badal said that the state had come out with one of its own kind ‘earn your incentive’ policy. The state is the first to provide online approvals in a transparent manner, he said.
For the first time, substantial incentives have been given to small and medium industry under the policy. For zone-1, manufacturing units with fixed capital investment (FCI) from Rs 1 crore to Rs 10 crore would be eligible for 50 per cent of VAT and 75 per cent of CST retention for seven years. For units with Rs 10 crore to 25 crore FCI, these benefits would be for eight years. Units with Rs 25 crore-Rs 100 crore FCI would be eligible for 60 per cent of VAT plus 75 per cent of CST retention with maximum of 60 per cent of FCI for 10 years and units with FCI from Rs 100 crore to Rs 500 crore, VAT incentives would be 70 per cent plus 75 per cent of CST retention with maximum of 70 per cent of FCI for 11 years.
Those units with FCI above Rs 500 crore will enjoy 80 per cent of VAT incentive plus 75 per cent of CST retention with maximum limit of 80 per cent of FCI for 13 years.
In addition, these units will have 100 per cent exemption in electricity charges, stamp duty and property tax.
For industry in Zone II, units with FCI of Rs 10 to Rs 25 crore would enjoy 25 per cent VAT plus 50 per cent of CST retention for eight years, units with FCI of Rs 25 to Rs 100 crore would have 30 per cent of VAT and 50 per cent of FCI for 10 years, units with FCI Rs 100 crore to Rs 500 crore would have 35 per cent of VAT and 50 per cent of CST retention for 11 years and units with FCI above `500 crore would enjoy 40 per cent of VAT and 50 per cent of CST retention for 13 years besides 50 per cent exemption in electricity duty, stamp duty and property tax.
Giving a new boost to agro and food processing industry, such units would also have Mandi fee, rural development fee, infrastructure development cess incentives besides purchase tax incentives on wheat and milk. It has been decided that no purchase tax would be levied on wheat and milk purchased and processed in the state. It has also been decided that no VAT/entry tax will be charged on farm equipment.
In a major step to make SAS Nagar Mohali and Amritsar as IT hub of the state, Badal on Monday announced a plethora of incentives, including VAT incentives, ensuring 24 hour power, stamp duty, property tax exemption and exemption from Punjab Pollution Control Board.