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THE SIKKIM INDUSTRIAL PROMOTION & INCENTIVE (AMENDMENT) ACT, 2003
THE SIKKIM INDUSTRIAL PROMOTION & INCENTIVE (AMENDMENT) ACT, 2003
(ACT NO. 11 OF 2003)
AN ACT to amend the Sikkim Industrial Promotion and Incentives Act, 2002.
BE it enacted by the Legislature of Sikkim in the Fifty-Fourth Year of the Republic of India as follows:-
1. (1) This Act may be called the Sikkim Industrial Promotion and Incentive (Amendment) Act, 2003.
(2) It shall come into force at once.
Amendment of Section 2
2. In the Sikkim Industrial Promotion and Incentive Act, 2000, (hereinafter referred to as the said Act), section 2 shall be renumbered as sub-section (1) of that section and in sub-section (1) as so renumbered, for the word “five” the word “ten” shall be substituted and after sub-section (1) as so renumbered, the following sub-sections shall be inserted, namely:-
“(2) The Scheme will also be applicable to existing units in case of diversification, modernization and expansion.”
(3) Diversification, modernization and expansion should entail enhancement in the existing capacity by at least 25% and the package of incentive admissible to the unit shall relate to the expanded portion only. For the purpose of this calculation undepreciated value of the capital investment made on land, building, plant and machinery of the unit will be taken into consideration.”,
Amendment of section 3
3. In the said Act, in section 3,-
i) after clause (d) following clauses shall be inserted, namely:-
“(dd) Diversification” means separately identifiable investment made by an existing industrial unit in the fixed capital assets to set up a project for manufacturing of new products (s) provided that the additional investment in the fixed assets is not less than 25% of the gross fixed capital and increase of additional employment is at least by 10%.
(ddd) “Expansion” of an industrial units means additional fixed unit. For the purpose of calculation, Gross value of all the capital investment made on land, building and plant machinery of the existing unit will be taken into consideration. Expansion shall also imply an increase of at least 25% in the existing installed capacity as well as increase of additional employment of at least by 10% . Prior to going for expansion, the units should be operating at least at a minimum of 80% capacity during the three previous years.”
(ii) after clause (e), the following clause shall be inserted, namely:-
“(ee) “Modernization” means separately identifiable investment made by an existing industrial unit in the fixed capital technology having a definite advantage in reduction of cost of production provided that the additional investment in the fixed assets should not be less than 25% of the gross fixed capital.
The incentive available to the unit undergoing expansion/diversification/modernization shall be for the additional investment made and/ or the increase in production over the average of three previous years prior to the year when the unit goes for expansion/diversification as applicable. The year for this purpose shall mean a financial year. The units which have taken up expansion/diversification/modernization plan prior to coming into force of this policy should intimate the concerned agency within three months from the date of implementation of the policy”.
4. Amendment Section 5
In the said Act, for the existing section 5, the following section shall be substituted, namely:-
For the benefits/incentives under this Act, the following authorities shall have the power of sanctioning namely:-
Sectioning Authority 5
(1) General Manager of District Industries Centres - up to Rs. 10,000/- (Rupees en thousand).
(2) Director of Industries upto Rs. 1,00,000/- (Rupees one lakh)
(3) Secretary Industries- upto Rs. 1,50,000/- (Rupees one lakh and fifty thousand).
(4) Minister-In-charge, Industries - all cases above Rs. 1.5 lakhs to Rs. 5 lakhs (Rupees five lakhs)
(5) There shall be a Committee constituted under the Scheme consisting of the Minister Industries with secretary, Industries, Secretary, Finance and Director, Industries as members who shall sanction subsidies incentive between Rs. 5 to Rs. 8 lakhs (Rupees five to eight lakhs).
5. Insertion of New section
(6) All cases above Rs. 8 lakhs (Rupees eight lakhs) will be placed in the Cabinet.” In the said Act, after section 6, the following sections shall be inserted, namely:-
Subsidy on State 6 A. Capital Investment
An investment subsidy on the total investment shall be provided on a graded level to the industry. It will be available to both new as well as those carrying out expansion, diversification or modernization activities.
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Artisan and Tiny Scale Units |
Small Scale Units |
Medium/Large Scale Units |
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a) 15 percent of total capital investment in plant and machinery subject to a maximum of Rs. 30,000/- (Rupees thirty thousand). |
a) 10 percent of total capital investment in plant and machinery, subject to a maximum of Rs.5 lacs. (Rupees five lakhs). |
a) 5 percent of total capital investment in plant and machinery, subject to a maximum of Rs. 10 lacs (Rupees ten lakhs). |
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b) 30 percent of total capital investment in plant and machinery subject to a maximum of Rs. 60,000/- (Rupees sixty thousand) for units set up by local entrepreneurs. |
b) For units set up by local entrepreneurs 10 per cent of total capital investment in plant and machinery, subject to a maximum of Rs. 10 lacs. (Rupees ten lakhs). |
b) For units set up by local entrepreneurs 10 percent of total capital investment in plant and machinery subject to a maximum of Rs. 20 lacs twenty lakhs). |
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c) For units set up in the thrust areas 20 percent of total capital investment in plant and machinery subject to a maximum of Rs. 40,000/- (Rupees forty thousand). |
c) For units set up in the thrust areas 15 percent of total capital investment in plant and machinery, subject to a maximum of Rs. 7 lakhs (Rupees Seven lakhs) |
c) For units set up in the thrust area 10 percent of total capital investment in plant and machinery, subject to a maximum of Rs. 15 lakhs (Rupees fifteen lakhs) |
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d) For units set up in the thrust areas by local entrepreneurs 20 percent total capital investment in plant and subject to a maximum of Rs. 80,000/- (Rupees eigthty thousand) |
d) For units set up in the thrust areas by local entrepreneurs 15 percent of total capital investment in plant and machinery, subject to a maximum of Rs. 14 lakhs (Rupees fourteen lakhs). |
d) For units set up in the thrust areas by local entrepreneurs 20 percent of total ‘capital in plant and machinery, subject to a maximum of Rs. 30 lakhs (Rupees thirty lakhs) |
(1) In order to encourage and assist industrial units to be self sufficient in their requirements of powers, the State Government shall subsidies upto 25 percent of the cost for purchase of captive power generating sets subject to a maximum of Rs. 1 lakh (Rupees one lakh). And in case of units set up by local entrepreneurs subsidy will be 50 percent subject to a maximum of Rs. 2 lakhs.
(2) Industries set up in the thrust area shall get a 30 percent subsidy subject to a maximum of Rs. 1.25 lakhs (Rupees one lakhs and twenty five thousand). Incase of units set up by local entrepreneurs in the thrust area subsidy will be 60 percent subject to a maximum of Rs. 2.50 lakhs.
A new unit with fixed capital investment exceeding Rs. 3 crores set up in a district where there are no medium or large Scale Industries will be given pioneer status. Such unit will be eligible for additional State Capital Investment Subsidy of 5% of fixed capital investment subject to a ceiling of Rs.10 lakhs. Such units will also be given Power Subsidy for an additional period of 2 years.
Special incentives as detailed below shall be granted to Women entrepreneurs, namely:-
(1) Additional State Capital Investment Subsidy of 5 % subject to a ceiling of Rs. 5 lakhs which constitute more than 50% of the workforce in the industry.
(2) Additional Interest Subsidy on working capital of 2% subject to a ceiling of 1 lakh for a period of three years from the date of commencement of commercial production.
(3) Built up factory sheds shall be allotted to the women entrepreneur on priority basis and the rent will be subsidized @ 75% of the economic rent for a period of five years from the date of commencement of commercial production.
Stipend at the rate of Rs.500/- (Rupees five hundred) per month per trainee shall be provided for training of 100 youth annually for special Entrepreneurship Development Programme (EDP) to be conducted by Government approved/recognized Institutions subject to the condition that the training period shall not be less than 3 (three) months duration.
Small Scale, Village and Cottage Industrial Units will be reimbursed in full for the amount paid towards Stamp Duty and Registration fee for securing loans and other incentives from Financial Institutions including mortgage of fixed assets. The reimbursement will be admissible after disbursement of loan by Financial Institutions/Banks and will be subject to the condition that the assets mortgaged would not be transferred for a period of 5 (five) years.
(1) The State Government will reimburse annually up to 30% (thirty percent) of the realistic wage bill for local employees. This would be for three years from the date of entertainment. The maximum limit of such subsidy is Rs. 1 lakh (Rupees one lakh).
(2) Fifty percent of the cost incurred on the training of local employees will be reimbursed subject to the following conditions, namely:-
(a) Such trained person shall be absorbed in the unit failing which the unit will refund the subsidy amount paid for the same.
(b) Training shall be conducted in an Institute approved by the State Government.
(1) Cost of Laboratory Equipment for the purpose of quality control and ISI certification subject to a maximum of Rs. 10,000 (Rupees ten thousand) per unit will be reimbursed in cases where it does not form part of the project cost. For local entrepreneurs Rs. 20,000 (Rupees twenty thousand) per unit will be reimbursed.
(2) Export oriented units committing to export at least 50% (fifty percent) of the value of the turnover will be eligible for an additional reimbursement of Rs.1,00,000/ (rupees one lakh) against such quality control measures. For local entrepreneurs Rs, 2,00.000 (Rupees two lakhs) will be reimbursed.
An industrial unit shall receive a one-time subsidy on consultancy charge paid to an approved Consultant as per the scale noted below:-
(1) For project upto Rs. 10 lakhs 3% subject to maximum of Rs. 20,000/-
(Rupees ten lakhs) (Rupees twenty thousand). For local entrepreneurs 6% subject to maximum of Rs. 40,000 (Rupees forty thousand).
(2) For project above Rs.10 lakhs 3% subject to a maximum of Rs.1,00,000/ Rupees ten lakhs)
(Rupees one lakh). For local entrepreneurs 6% subject to maximum of Rs. 2,00,000 (Rupees two lakhs).
Entrepreneurs sent out side Sikkim with the approval of the Director of Industries for study tours and inplant training shall be eligible for reimbursement of the return journey expenses of second class train fare and an allowance of Rs.1000/- (Rupees one thousand) per mensem per entrepreneur;
Provided that the period of such a study tour/inplant training should not exceed three months and the entrepreneur shall give an undertaking in writing to the Department of Industries that he/she shall start an industrial unit after obtaining the necessary technical knowhow of the industry concerned.
The study tour and in plant training for a period not exceeding three months may also be made available for workers who are sent outside the State.
Provided that the industrial unit sending such workers shall obtain an undertaking from them that thay shall work in the unit at least for a period of three years from the date they complete training. The reimbursement of expenditure on return journey of Second Class by train and allowance of Rs.500/- (Rupees five hundred) per workers shall be eligible to the industrial unit concerned in such cases.
The State Government shall endeavour to provide a developed land with all infrastructural facilities at Growth Centres to all new units except those in the “Services” and “Village Industries Sector” in the following manner, namely:-
1) The developed land will be allotted on lease basis for a period of 30 (thirty) years.
2) The State Government will subsidies the cost of land development at the rates given below:
a) Small Scale Industries - 25%
b) Export Oriented Unit and Units owned and managed by local Entrepreneurs - 30%
c) Large and medium Units (as per definition) - 15%
3) The cost of land development will be recovered from the allottee or Industrial units after framing allotment rules, which shall be notified.
The State Government shall provide transport subsidy of 50% for transportation of Plant and machineries from any part of India to the location of unit in Sikkim at maximum limit of Rs. 1 lakh (Rupees one lakh). For local entrepreneurs the maximum limit will be Rs. 2 lakhs (Rupees two lakhs).
A subsidy of 50% shall be admissible to meet the cost of technical know-how obtained from organizations approved in advance by Government of Sikkim on a case to case basis. The subsidy will be released only on commencement of commercial production. The subsidy will be 60% for Small Scale Industrial Units set up in thrust areas and Export Oriented Unit.
Special incentives shall be granted to the Agro and Food processing Industries as detailed below:-
1. Additional State Capital Investment Subsidy of 5% subject to a ceiling of Rs.5lakhs for agro and food processing industries.
2. 50% of the cost payable for getting Food Product Order (FPO) license /AGMARK/ Trade Mark for the products for food processing industries subject to a maximum ceiling of Rs. 1 lakh (Rupees One Lakh).”
In the said Act, for the existing section 8, the following section shall be substituted, namely:-
(1) There shall be 100% reimbursement of power bill for an industrial unit consuming up to Rs.50,000/- (Rupees fifty thousand) per annum. The reimbursement above Rs. 50,000 /- (Rupees fify thousand) shall be to the extent of Rs. 50,000/- (Rupees fifty thousand) plus 25 percent of the balance of actual payment subject to a maximum of Rs. 2 lakhs (Rupees two lakhs).
(2) The State Government shall grant a subsidy of 30 percent power tariff to industrial units coming up in Growth Centre in Thrust Areas.
(3) 50% of the cost incurred on linking of power from the main line to the factory shed subject to a maximum ceiling of Rs. 50,000/- (Rupees fifty thousand)
(4) Power tariff to the Industries shall be levied at the cost of production as and when available.
In the said Act, after section 12, the following section shall be inserted, namely:-
(1) The State Sales Taxes shall be exempted for a period of 10 (ten) years from the date of commencement of actual Commercial Production. However, for the units set up in the thrust areas, the exemption period will be 12 (twelve) years.
(2) The levy of State excise duty and sales tax on units manufacturing alcoholic products will continue as per notification 6/CGO/90/DI/95-96/784 dated 03.10.2000.
(3) Exemption of Central Sales Taxes and Central Excise Duties will be goverened by various Notifications/Orders issued by Government of India in this regard.”
