DNA SPECIAL: Maharashtra govt to dole out subsidy for MSMEs

Maharashtra government has amended modalities for sanction and disbursement of industrial promotion subsidy under GST regime to cover large industries and the micro, small and medium enterprises (MSMEs) in the state.

These units will be now entitled to benefit from the Gross State Goods and Services Tax (SGST) reimbursement based on industrial subsidy. 

The government has issued notification on May 8 as in its earlier notification released on March 8 this year the Gross SGST reimbursement based industrial subsidy was applicable to mega and ultra mega projects and the large projects and MSMEs were not covered. 

MSMEs with investment up to Rs 50 crore will now get Gross SGST reimbursement based industrial subsidy ranging between 30 percent and 100 per cent depending on the location of units. There are about 3.8 lakh MSMEs spreading across food processing, auto ancillary, pharma and bio technology, electronic sectors in the state.

Large projects with investment of Rs 100 crore to Rs 750 crore will get Gross SGST reimbursement based industrial subsidy depending on the location of units.

State industries department officer told DNA,'' The government has taken a conscious decision to implement Gross SGST reimbursement based industrial subsidy and not Net SGST reimbursement based industrial subsidy. The Gross SGST reimbursement based industrial subsidy is higher and it will help investors reap benefits.'' He informed that the NET SGST reimbursement based industrial subsidy implemented by Gujarat, Haryana, Punjab and Andhra Pradesh offers lower tax reimbursement to investors.

As per the state's new industrial policy released in March this year, mega projects with an investment of Rs 200 crore to Rs 1,500 crore are entitled to get 100 percent Gross SGST reimbursement based industrial subsidy depending on the location of industrial units. The ultra mega projects with an investment of Rs 4,000 crore will also get 100 per cent Gross SGST reimbursement based industrial subsidy across the state. In case of ultra mega project in the agri-processing sector the units will get 20% more reimbursement.

The tweak in the modalities of sanction and disbursement of industrial promotion subsidy under GST regime is important as the government in its new industrial policy expects an investment of Rs 10 lakh crore by 2023-24 with the creation of 40 lakh jobs. The government also believes the revised policy will attract more investments in the state. The government has set an ambitious target to attain manufacturing sector growth rate of 12% to 13% with its gross state domestic product share of 25% by 2023-24.

Location Matters

• MSMEs with investment up to Rs 50 crore will now get Gross SGST reimbursement based industrial subsidy ranging between 30 per cent and 100 per cent depending on the location of units.
• Large projects with investment of Rs 100 crore to Rs 750 crore will get Gross SGST reimbursement based industrial subsidy depending on the location of units.