Page 28 - Plastcs News January 2019

FeAtures

Gujarat's Plastic-friendly Policy

CA Pathik Shah

Gujarat government provides upto 75% reimbursement for setting up Plastic Industry in the state

hile Maharashtra is interested in banning the use 2 SGST related incentive:
Wof Plastics its seems only one state is focussed to (a) Unit will be allowed reimbursement of 80% of the
understand the importance of Plastics and is ready to net SGST paid for 7 years.
welcome them whole heartedly.
(b) 75% of eligible fixed capital investment will be
The Gujarat government has declared revised policy for considered for reimbursement.
plastic industry on 6th January, 2017 the Scheme for
assistance for plastic industry under Gujarat Industrial Conditions for availing incentive
Policy 2015 (Government resolution no. MIS-102014- An industrial undertaking required to employ persons
924790-I) (hereinafter referred as Plastic Policy)
domiciled in Gujarat to the extent of at least 85% of its
Operative period of Plastic Policy total number of employees.

Any unit has acquired assets after 1st January, 2015 to 31st Illustration explaining Interest and SGST refund
December, 2019 are eligible to apply under this scheme. mechanism

Unit has investment of Rs. 30 crore and taken term loan of
Rs. 20 crore @10% p.a., incentives available are as follow:
SGST Incentive

Capital investment 30 crore
Eligible fixed capital 30 * 75% = 22.5 crore
investment
eligible refund per year for 3.21 crore per year
Eligible Plastic Industry Enterprise 7 years
Hence, unit will be eligible to get refund of Rs. 3.21 crore
Industrial unit engaged in manufacturing of plastic
products/items/articles by using plastic as main raw in each year.
materials like LLDPE, LDPE, HDPE, PP, PVC, Nylon, Interest Incentive
Polyesters, Polystyrene, Polycarbonate, polyamide (nylon
6, nylon 66), etc. Interest amount – 20 crore term loan * 7% interest rate =
1.4 crore – maximum eligible interest would be Rs. 1 crore
Eligible Fixed Capital investment
Now in the above case, if unit has made purchases of Rs.
investment made in new building, new plant and 50 crore and sale in Gujarat of Rs. 95 crore. In such case,
machinery, equipment and/or imported second hand SGST paid on purchase @9% will be Rs. 4.5 crore and SGST
plant and machinery/ equipment having residual life of payable @9% will be Rs. 8.55 crore on sale. In such case,
minimum five years as certified by chartered Engineer, refund calculation will be as follow:
including cost of installation, erection, transportation,
electrification and other related assets (except cost of SGST refund Amount (in crore)
land stamp duty and registration charges) required for (A) SGST on sale Rs. 8.55
manufacturing of the product. (B) SGST on purchase Rs. 4.50
Quantum of Incentive (C) SGST Paid (A-B) Rs. 4.05
SGST eligibility 80% of (C) Rs. 3.24
1 Interest Subsidy: Interest subsidy @7% per annum out
of interest payable on the term loan availed with the Maximum refund eligible Rs. 3.21
maximum amount of Rs. 1 crore per annum for period Hence, total SGST eligible for refund will be Rs. 3.21 crore
of 5 years. and Interest eligible for refund will be Rs. 1 crore.

Plastics News Januar y 2019 28