TS Electronic Policy
Incentives provided by the Government of Telangana:
Common incentives applicable to all categories of Electronics Industry
- Electronics Industry units are regulated and governed as per the provision of the Air Act, Water Act, and E(P) Act, 1986
- Electronics Industry companies are exempt from the purview of statutory power cuts on similar lines as the IT/ITES Industry
- Electronics units are permitted to file self-certificates, in the prescribed formats for the following:
- The Factories Act, 1948
- The Maternity Benefit Act,1961
- The Telangana Shops & Establishments Act, 1988
- The Contract Labour (Regulation & Abolition) Act, 1970
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
- General permission on similar lines of IT/ITES Industry for three shift operations with. Women working in the night for Electronics Industry.
Exemption of Registration, Transfer & Stamp Duty: Electronics industry shall be eligible for 100% reimbursement of the Stamp Duty, Transfer Duty and Registration Fee paid on sale / lease deeds / mortgages and hypothecations on the first transaction and 50% thereof on the second transaction. This is not applicable on allocation of Government land.
- Electronics industry is classified as industrial units for the purpose of levying the industrial power tariff category. Industrial Power Category Conversion Certificate is accorded on all the Service Connections (Power Meter No.), and exclusively used by the IT industry for their operations, even in multiple locations/meters. The effective date of application of the incentive of Industrial Power Category tariff, is from the date of issue of the said Certificate by Government.
- Electronics companies will be permitted to avail renewable energy under open access system from within the state after paying cost component to DISCOMs as fixed by ERC (subject to a maximum of one third of their total power requirements).
- Exemption of Electricity Duty: New Electronics industry units, after coming into commercial operations will be entitled for 100% exemption on Electricity duty for a period of 5 years
Assistance in Patent Filing: 50% of the cost of filing patents will be reimbursed to the companies having their headquarters in Telangana, subject to a limit of INR 2 Lakhs
Reimbursement of Costs for Quality Certification: 50% subsidy on the expenses Incurred for quality certification limited to INR 2 Lakhs (Conformity European (CE), China Compulsory Certificate (CCC), UL Certification, ISO, CMM Certification, SA, RU etc.)
VAT/ CST/ SGST Reimbursement: 100% Reimbursement of net VAT/CST or State Goods and Services Tax (SGST) for a period of 5 years from the date of commencement of commercial production to Micro and Small companies, limited to a maximum of INR 5 Crores. In case of Medium, Large and Mega companies, this reimbursement is applicable for a period of 7 years from the date of commencement of commercial production, limited to the investment made in plant and machinery.
The unit can deposit the tax for the first quarter and reimbursement of net VAT would be credited at the end of the quarter, subject to its adjustment, depending upon actual incident of taxation. Effectively, it means reimbursement of net VAT on a quarterly basis and will be applicable for first 5 years for Micro and Small companies, and first 7 years for Medium, Large and Mega companies.
Transport Subsidy: Transport subsidy on fuel cost / billing and freight (train), for the first five years on imports of the parts & components, from the sea port to Telangana plant. Following is the percentage subsidy that shall be offered over 5 years: 1st year – 60%, 2nd year – 50%, 3rd year – 40%, 4th year – 30% and 5th year – 20%.
Skill up-gradation & Training: To provide skill up-gradation training in the Electronics sector for required number of candidates and to contribute matching share in the EDF as per Government of India Policy
Investment Subsidy: 20% Investment Subsidy, up to a maximum of INR 2 Crores, for the first 25 eligible companies in Medium, Large and Mega categories; up to a maximum of INR 50 Lakhs for the first 50 eligible companies in Micro and Small categories
Land Cost and Lease Rentals:
- Land shall be made available at affordable costs to companies. Further, the Government shall provide a 25% subsidy on lease rentals to eligible companies for a period of 10 years.
- 20% of land that is allotted by the Government of Telangana can be used for dormitories exclusively for the employees
Promotion of use of Cleaner/ Greener Practices: Suitable incentives from policies and GOs approved by the Industries and Commerce, and Energy departments shall be applicable.
Land Conversion Subsidy: The Telangana government aims to encourage the private EMCs by assisting in conversion of land from agricultural to non-agricultural.
Specific Incentives for Mega Projects and other Areas of Strategic Importance
The different segments in the Electronics sector need to be promoted to enable them to compete with the global markets as well as domestic consumption.
- Mega Projects: Government will also extend tailor-made benefits to Mega and Strategic Projects to suit to a particular investment requirements on case to case basis.
- Special incentives shall be provided to the following focus areas
- Medical electronics
- Aviation and automotive electronics
- Mobile Manufacturing Units
- Allotment of Land: To allot land without infrastructure cost considering to “Anchor Unit” and total of 10 units will be considered as Anchor units and will be considered for allocation of land on cost basis to this industry.
- Power Subsidy: To supply power on average cost of service (as fixed by Telangana State Electricity Regulatory Commission). Alternatively, the units can avail 25% power subsidy for a period of 3 years or INR 30 Lakhs, whichever is earlier.
- Reimbursement of Costs for Quality Certification: To develop a system of self-certification, by the Industries Department, in consultation with concerned departments, subject to the unit complying with all provisions which will be followed for these units.
- Stamp Duty: To reimburse 100% stamp duty.
- Patents: To reimburse 100% cost towards incentives for filing patents limited to INR 5 Lakhs.
- Capital Subsidy: To allow a 20% capital subsidy, subject to a ceiling of INR 10 Crores per company (including subsidiaries and ancillary units).
- Interest Subvention: 5.25% per annum on term loan for a period of 5 years or till reaching 50% of the capital involved, whichever is earlier, subject to an overall ceiling of INR 1 Crore per unit per annum.
- Reimbursement of Net VAT: The unit can deposit the tax for the first quarter and reimbursement of net VAT would be credited at the end of the quarter, subject to its adjustment depending upon actual incident of taxation. Effectively, it means reimbursement of net VAT on a quarterly basis and will be applicable for first 5 years without any investment limit.
- VAT Rate: The rate of VAT will be 5%.
- CST: To waive off CST @2%.
- Additional 10% investment subsidy for Women subject to a maximum of additional INR 10 Lakhs for MSEs.
- INR 5 Lakhs as recruitment assistance, basing on the level of employment generated, for employing minimum 50 employees within two years of commencement of commercial operations. This assistance will be managed and disbursed by TASK.
- Providing 25% subsidy on lease rentals up to INR 10 Lakhs per annum maximum up to a period of three years, for the plug-and-play built up office space from 1000 sft. to 10,000 sft., Industry Shed ranging from 1000 sft to 20,000 sft, leased from Government or Private owned IT Park / IT SEZ / Industrial Park.
SC / ST Entrepreneurs: Incentives and subsidies shall be applicable as mentioned under T-PRIDE.
Support to R&D Institutions
- Promote innovation in the Electronics sector through Awards by way of grants.
- Assistance at 20% of project cost or up to INR 10 Lakhs, whichever is lower, for sponsored research work from any industrial unit to Government R&D Institution / Government Technical College
I Mega Electronics Hub: Government of Telangana is developing Hyderabad Information Technology and Investment Region (ITIR) in an area of 200 sq km.
- Common Facilities Centre: Common Facilities Centres would be created in each of the proposed EMCs.
iii. PPP for Creation of Electronics Infrastructure: The facilities, in the form of electronics hubs, hardware parks and electronics zones, shall be developed adopting a transparent PPP policy.
- Provision of Built-up Space: The Government of Telangana shall actively pursue the creation of built up spaces and provide it at subsidized rates to eligible companies.
- Other Critical Infrastructure:
- Connectivity: The Government shall strive to provide state of the art connectivity across the city.
- Assured Power: All the notified EMCs will have an assured 24/7 access to power. Necessary laws will be passed to facilitate this mechanism.
Governance Mechanisms and Facilitations for Electronics Industry
Effective Single-Window System:
The government has implemented a very effective clearance system for the industries that will go beyond the traditional single window system. Electronics Industry will also qualify and follow the similar privileges for single window clearance
This system, called the Telangana State Industrial Project Approval and Self-certification System (TS-iPASS), will be strengthened by way of legislation. A Right to Single Window Clearance, on the lines of the Right to Information, will be bestowed for all applicants. Penal action will be imposed on the concerned officers who delay the applications. The procedure for applying for the incentives offered by the State is as follows
- The format of application is common for all the aforesaid incentives and can be filed on-line by visiting our web site: www.telangana.gov.in. However, physical copy of the application, along with requisite supporting documentation, as is indicated, shall be filed for processing and placing it before the CCESDM for consideration of such incentives as per eligibility.
- Processing and release of incentives are subject to verification and authenticity of information furnished by company.
- An Electronics company is eligible and can apply for claim of any incentive under one category only.
- The interpretation and decisions of the Government is final with regard to applications made by the Industry for any of the above incentives.
An empowered ‘Consultative Committee on Electronics System Design and Manufacturing (CCESDM)’would be formed with the representatives of Electronics industry and the other stakeholders. The CCESDM would administer the incentives in a speedy, time-bound and transparent manner.
Such applications shall be prima facie scrutinized by the Sub-Committee of the CCESDM headed by the Secretary, ITE&C, in association with industry representatives, on the eligibility, veracity of technical/financial information, etc., before being placed before the CCESDM for its consideration.
Time-bound approvals: The following procedural reform would be undertaken with an aim to provide approvals to the industry/ investors within the timeline as mentioned under TS-iPASS
- Integrated application for all permissions
- Escort Officer to be assigned the responsibility for getting approvals
- Escalation at various levels and regular monitoring
A provision shall be made in the relevant legislations or rules that in case the required approvals are not granted within 4 weeks of receipt of an application in full-shape, the approval shall be deemed to have been granted.
The ITE&C Department shall issue appropriate Implementation/Operational Guidelines with simplified application proforma and procedure for claiming of the incentives.