Overview

In order to encourage the dispersal of industries to the less developed areas the State Government has been giving a Package of Incentives to New / Expansion units to set up in the developing region of the state since 1964 under a scheme popularly known as Package Scheme of Incentives. The said scheme was amended from time to time. As per the Government Resolution dated 1^st April, 2013, Govt. has declared Package Scheme of Incentives 2013 shall remain in operation from 1st April 2013 to 31st March 2018.

An eligible unit in the Private Sector, State Public Sector / Joint Sector and the Co-operative Sector & Central Public Sector (Only for Mega Project) is considered for incentives under the PSI 2013 Scheme.

Mega Projects / Ultra Mega Project

The quantum of incentives within the approved limit is decided by the Principal Secretary, Industries on a case to case basis. The Cabinet sub Committee under the chairmanship of the Chief Minister of Maharashtra is having the power to sanction customized package of incentives and offer special / extra incentives for the prestigious Mega Projects / Ultra Mega Project on a case to case basis.

As per Government Resolution the projects with Fixed Capital Investment (FCI) or employing direct regular persons according to the threshold limits stated in the below table will be classified as Mega Projects / Ultra Mega Project:

Type of Unit	Taluka/Area Classification	Minimum Fixed Capital Investment (₹. In Crores)	Minimum Direct Employment (Nos.)
Mega Project	A & B	750	1,500
	C	500	1,000
	D & D+	250	500
	No Industry Districts & Naxalism Affected Area	100	250
Ultra Mega Project	Entire State	1,500	3,000

Following services under Package Scheme of Incentives (PSI) are available online:

1. Stamp Duty Exemption Certificate (SDEC) ^{Apply Now}
2. Grant of Eligibility Certificate ^{Apply Now}
3. Sanction of Incentives ^{Apply Now}

Incentives

The Financial Incentives for MSME/LSI, under PSI-2013 are as follows:

New MSME/LSI unit be eligible for a basket of incentives & the total quantum is linked with Fixed Capital Investment. The total quantum of Incentives & the eligibility period is provided that-

Taluka / Area Classification	Ceiling as % of Fixed Capital Investment		Number of years
	Micro & Small Manufacturing Enterprises	Medium Manufacturing Enterprises / LSI	Micro & Small Manufacturing Enterprises	Medium Manufacturing Enterprises / LSI
A	-	-	7	7
B	20	-	7	7
C	40	30	7	7
D	70	40	10	7
D+	80	50	10	7
No Industry District	90	70	10	7
Naxalism Affected Area	100	80	10	7

The total quantum of incentives for the food/agro processing units covered as per GR, will be 10% over and above the limit mentioned above and such units will get one more year of eligibility to avail of the incentives.

1. Industrial Promotional Subsidy (IPS) for MSMEs

The eligible New/Expansion Micro, Small and Medium Manufacturing Enterprises, which are set up in different parts of the State, will be eligible for Industrial Promotion Subsidy(IPS) as follows:

SN	Taluka/Area Classification	Quantum of Industrial Promotion Subsidy Every Year
1.	Naxalism Affected Area	VAT on local sales minus input Tax Credit (ITC) or zero whichever is more + CST payable + 100% of ITC.
2.	No Industries District	VAT on local sales minus ITC or zero whichever is more + CST payable + 75% of ITC.
3.	Entire Vidharbha and Marathwada (Other than Sr.No. 1 & 2)	VAT on local sales minus ITC or zero whichever is more + CST payable + 65% of ITC.
4.	Group D+ Taluka (Other than Sr.No. 1 & 3)	VAT on local sales minus ITC or zero whichever is more + CST payable + 50% of ITC.
5.	Group D Taluka (Other than Sr.No. 1 & 3)	VAT on local sales minus ITC or zero whichever is more + CST payable + 40% of ITC.
6.	Group C Taluka	VAT on local sales minus ITC or zero whichever is more + CST payable + 30% of ITC.
7.	Group B Taluka	VAT on local sales minus ITC or zero whichever is more + CST payable + 20% of ITC.



2. Industrial Promotional Subsidy (IPS) for Large Scale industries

The eligible New/Expansion Large Scale Manufacturing Units, which are set up in different parts of the State, will be eligible for Industrial Promotion Subsidy (IPS) as follows:

SN	Taluka/Area Classification	Quantum of Industrial Promotion Subsidy Every Year
1.	Naxalism Affected Area	100% VAT on local sales minus input Tax Credit (ITC) or zero whichever is more + CST payable.
2.	No Industries District, Vidarbha and Marathwada	90% VAT on local sales minus ITC or zero whichever is more + CST payable.
3.	Group D+ Taluka (Other than Sr.No. 1 & 3)	80% VAT on local sales minus ITC or zero whichever is more + CST payable.
4.	Group D Taluka (Other than Sr.No. 1 & 3)	70% VAT on local sales minus ITC or zero whichever is more + CST payable.
5.	Group C Taluka	60% VAT on local sales minus ITC or zero whichever is more + CST payable.



3. Expansion/Diversification Units

Existing/New Micro & Small Manufacturing Enterprises, Medium Enterprises / LSI (including manufacturing IT/BT) units, qualifying as Expansion / Diversification units, will also be eligible to get incentives for Expansion /Diversification, equivalent to 75% of the incentives admissible for New Units. The eligibility period for availing of the incentives will however be reduced by one year in case of Expansion /Diversification units.

4. Interest Subsidy

All new eligible Micro, Small & Medium Manufacturing Enterprises in areas other than Group ‘A’ are eligible for interest subsidy. The Interest Subsidy is payable only on the interest actually paid to the Banks and Public Financial Institutions on the term loan for acquisition of fixed capital assets. The Amount of interest subsidy is effective rate of interest (after deducting interest subsidy receivable any institution / under any Govt. of India Scheme or 5% p.a. whichever is less).

5. Exemption from Electricity Duty

Eligible new units in C, D, D+ areas and No Industry District(s) and Naxalism Affected Area are exempted from payment of Electricity Duty during the eligibility period not exceeding 15 years. In Group A & B area, 100% Export Oriented Units (EOUs), Information Technology (IT) and Bio-Technology (BT) units are also be exempted from payment of Electricity Duty for a period of 7 years.

6. Waiver of Stamp Duty

New as well as units undertaking Expansion / Diversification are exempted of payment of stamp duty in C, D, D+ Talukas, No Industry District and Naxalism Affected Areas. However, in A and B areas, Stamp Duty exemption is available for BT & IT manufacturing units in Public Parks , BT & IT manufacturing units in private parks and for Mega Project is 100%, 75% & 50% respectively.

7. Power Terrif Subsidy

Eligible New Micro, small and Medium Enterprises (MSME), except the units in Group ‘A’ areas, are eligible for power tariff subsidy. The subsidy to the tune of ₹ 1/- per unit for the Units located in Vidarbha, Marathwada, North Maharashtra and the Districts of Raigad, Ratnagiri and Sindhudurg in Konkan Region and ₹ 0.50 per unit for the Units in other areas of the State for a period of 3 years from the date of commencement of commercial production, for the energy consumed and paid.

8. Strengthening the Micro, Small and Medium Manufacturing Enterprises

The followings are the incentives to promote quality competitiveness, research and development, technology upgradation, Water & Energy Conservation, Cleaner Production & Credit Raring.

1. New MSME’s and expansion thereof in all categories of areas eligible for following incentives.
1. 5% subsidy on capital equipment for technology upgradation subject to maximum of ₹ 25 lakhs.
2. 75% subsidy on the expenses incurred on quality certification limited to ₹ 1 lakhs.
3. 25% subsidy on capital equipment for cleaner production measures limited to ₹ 5 lakhs.
4. 75% subsidy on the expenses incurred for national patent registration limited to ₹ 10 lakhs and ₹ 20.00 lakhs for the International patents.
2. Incentives for Credit Rating of MSME’s in all categories of areas.

75% of the cost of carrying out credit rating by small industries development Bank of India / Government accredited Credit Rating Agency limited to ₹ 40,000 only.

3. New MSMEs, LSI and expansion thereof will be eligible for following incentives in all categories of areas.
1. 75% of cost of water audit limited to ₹ 1.00 lakhs.
2. 75% of cost of energy audit limited to ₹ 2.00 lakhs.
3. 50% of cost of Capital Equipment under the measure to conserve / recycle water limited to ₹ 5.00 lakhs.
4. 50% of cost of Capital Equipment for improving energy efficiency limited to ₹ 5.00 lakhs.

Eligibility Criteria

1. Eligibility of Units (Para 1.2 of PSI-2013)
1. Industries listed in the first schedule of the industries (Development and regulation ) Act, 1951or letter of intent under license provision of said Act, as amended from time to time
2. Manufacturing Enterprise as defined in the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006)
3. Information Technology (IT) manufacturing units registered with Directorate of Industries or MIDC or Development Commissioner (SEEPZ) or STPI in the State
4. Bio-technology Manufacturing units
5. Cold Storages
6. Machanized Food/Agro Processing Industries
7. Central Public Sector Units which qualify as Mega Project
2. Classification of Area (Para 1.3 of PSI-2013)

For the purpose of this scheme Maharashtra state has classified in to different area such as:

Group A	Industrially Developed area
Group B	Where some Industrial development has taken place but less than areas under Group A
Group C	Less developed other than those covered under Group B
Group D	Lesser developed area not covered under Group A, B, C
Group D+	Least developed area not covered under Group A, B, C, D
No Industry District (NID)	As notified in Annexure I of the GR
Naxalism Affected Area (NAA)	As described in GR NAVIKA-2008/C.R. 209/Ka. 1416, Dated 31st May, 2009




On the basis of group under which industrial unit in situated, different types of incentives are available to that industrial unit. More we go to less industrially developed area will get more incentives.

3. Classification of type of units, Investmentand Employment (Para 2.2 of PSI-2013)
1. MSMEs / Large Scale Units

Type of Units	Investment Required in Plant & Machinery
Micro enterprises	Up to ₹ 25 Lakhs
Small Enterprises	₹ 25 Lakhs - ₹ 5 Crores
Medium Enterprises	₹ 5 Crores - ₹ 10 Crores
Large Scale Units	₹ 10 Crores and above

2. Mega project

	Group	Investment Basis	Employment Basis
Ultra Mega Project	Entire State	More than ₹ 1500 Crores	More than 3000 persons
Mega Project	A & B	More than ₹ 750 Crores	More than 1500 persons
Mega Project	C	More than ₹ 500 Crores	More than 1000 persons
Mega Project	D & D+	More than ₹ 250 Crores	More than 500 persons
Mega Project	NID & NAA	More than ₹ 100 Crores	More than 250 persons

Mega project qualifying under Employment criteria shall have direct employment of minimum 75% local persons within 2 years from the date of commercial production

4. Criteria for New as well as Existing Unit
1. Existing Unit ( Para 2.3 of PSI-2013)
• Which has been set up and in production prior to 01.04.2013, or
• Which has been granted an Eligibility Certificate or availed of any incentives under any ofearlier scheme, or
• Which has filed valid application for EC under PSI 2007 with any of the implementing agencies on or before 31st March 2013.
2. New Unit(Para 2.4 of PSI-2013)

A New unit shall mean a unit which is setup for the first time by an entity in Private Sector/ Co-op sector/ Central or State Public Sector/ Joint Sector in any taluka, where there is no existing set up by the said entity.

• Which is not an existing Unit
• At least one effective step is completed on or after date of this Government Resolution for setting up a unit i.e. 01/04/2013.
• It is not formed as a result of re-establishment, mere change of ownership, change of constitution, reconstruction or revival of an existing unit.
5. Eligibility Criteria for Expansion / Diversification of unit:(Para 2.5 of PSI 2013)

The three conditions to be satisfied:

• Additional Investment: Additional Investment should exceed 25% of the Gross Fixed Capital Investment of the Provision financial year.

Micro, Small & Medium Enterprises	Not less than ₹ 25 Lakhs
Large Enterprises	Not less than ₹ 500 Lakhs

• Expansion or Expansion Cum Diversification should result in Increase in Installed capacity by 25%.
• Employment should increase in Non-supervisory category by 10% of which 80% should be local Persons

GR's and Notifications
GR Mega Project Approval - 05.03.2015	View Details
GR Eligibility to backward integration investment_declaration of incentive period - 12.09.2014	View Details
PSI Circular No 4 - 26.08.2014	View Details
GR Delegation of power to Principal Secy. (I) to approve Mega projects under PSI - 07 - 19.03.2014	View Details
GR Classification of Chincholi area in MIDC in D+ class - 01.03.2014	View Details
Circular PSI Procedure of issuing Eligibility Certificate LSI - 13.01.2014	View Details
Circular PSI Procedure of issuing Eligibility Certificate for Stamp Duty Exemption - 27.11.2013	View Details
Circular PSI Procedure of issuing Eligibility Certificate MSME - 27.11.2013	View Details
GR Modalities for sanction and disbursement of incentives to strengthen MSME and LSI - 19.10.2013	View Details
GR Modification to IPS GR dt.03.12.2008 - 30.08.2013	View Details
GR Consideration of investment period of Mega projects under PSI 2007 and 2013 - 12.08.2013	View Details
Modalities for sanction and Disbursement of Employer’s contribution to Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI) Under Para 5.9 of Package Scheme of Incentives 2007 - 12.08.2013	View Details
Corrigendum PSI 2013 Para 4.7 - 27.06.2013	View Details
GR Recovery of incentives fron closed units under PSI - 25.06.2013	View Details
GR PSI 2013 - 01.04.2013	View Details
GR Closure of PSI 2007 - 30.03.2013	View Details
GR Extension to PSI 2007 - 29.03.2012	View Details
GR Extension to PSI 2007 up to 31.03.2012 - 31.01.2012	View Details
GR Extension to PSI 2007 up to 31.01.2012 - 30.11.2011	View Details
GR Modifications of Para 1.1 and 5.10 of PSI 2007 - 31.10.2011	View Details
GR Extension to PSI 2007 up to 30.11.2011 - 30.08.2011	View Details
GR Extension to PSI 2007 up to 31.08.2011 - 30.06.2011	View Details
GR Modalities for Cleaner Production Measures under PSI 2007 - 18.06.2011	View Details
GR Procedural Rule for Change in constitution - 18.06.2011	View Details
GR Modalities for Royalty Refund under PSI 2007 - 17.06.2011	View Details
GR Extension to PSI 2007 upto 30.06.2011 and change in criteria of Mega Projects - 22.03.2011	View Details
Corrigendum PSI 2013 Annexure III - 25.10.2010	View Details
GR Modifications to para 5.2_5.1(A)_3.6(A)for the yr 2010-11 - 31.07.2010	View Details
GR Procedural Rules for Disposal of Assets - 18.07.2010	View Details
GR Procedural Rule for recovery from closed units under PSI - 12.07.2010	View Details
GR Modification to Para 5.8 of PSI 2007 - 03.06.2010	View Details
GR Grant of SCI under PSI2001 to Malegaon Taluka - 27.10.2009	View Details
GR Incentives to Powerloom and Gament Inds.under PSI 2001 - 22.05.2009	View Details
GR Electricity Duty exemption to Vidarbha and Marathwada - 02.03.2009	View Details
GR IPS 2007 for Non-Mega Industries - 04.12.2008	View Details
GR IPS 2007 for Mega Industries - 03.12.2008	View Details
GR Status D+_Tal.Malegaon - 30.04.2007	View Details
GR Increase in Project Cost_PSI-1988_1993 - 19.04.2007	View Details
GR PSI - 01.04.2007	View Details

Frequently Asked Questions - Package Scheme of Incentives (PSI)