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India By State - Assam - Taxation & Legalities




Taxation & Legalities

Policies & Incentives

Industrial policy Assam, 2008-13

The industrial policy was introduced by the state government to help generate economic development by accelerating the process of industrialisation in the state. The policy aims to generate employment and increase income by encouraging the establishment of micro-enterprises and as a result increase the share of industrial sector in the states GSDP. The government hopes that the policy and the incentives on offer through it will encourage exports and attract FDI, particularly from non-resident Indians.

The fiscal incentives on offer are:

  • Annual interest subsidy to micro-industrial units, at 30 per cent of the amount of interest paid on term loan to banks or financial institutions, for a period of five years from the date of commercial production, subject to a ceiling of US$ 2,000 per unit
  • Power subsidy for a period of five years to the eligible units, on power tariff paid on actual electricity consumed.
  • Subject to a ceiling of US$ 2,000 per year, 50 per cent subsidy to the eligible units on fees payable for obtaining quality certifications such as Bureau of Indian Standards (BIS), International Organisation for Standardisation (ISO), Food Products Order (FPO), Agricultural Marketing (AGMARK) and for obtaining technical know-how from recognised research laboratory or institutions such as Central Food Technological Research Institute (CFTRI) and Central Institute of Plastics Engineering &Technology (CIPET).
  • Subject to a ceiling of US$ 210,000 per unit, 25 per cent subsidy to micro-and small-industrial units for the cost payable to state power distribution company for drawing the power-line to the premises of the unit, including the cost of transformer. This subsidy shall be available only once to an industrial unit.

The policy also offers tax incentive:

  • All eligible units, which manufacture goods in Assam, will be entitled to exemption of 99 per cent of the tax payable under the Assam Value Added Tax (VAT) Act, 2003, and the Central Sales Tax Act, 1956, subject to the limits mentioned below:

 

Category

Micro

Small

Medium and Large

New Unit Seven years, subject to a maximum of 200 per cent of fixed capital investment. Seven years, subject to a maximum of 150 per cent of fixed capital investment. Seven years, subject to a maximum of 100 per cent of fixed capital investment.
Substantial expansion Seven years, subject to a maximum of 150 percent of additional fixed capital investment. Seven years, subject to a maximum of 100 per cent of additional fixed capital investment. Seven years, subject to a maximum of 90 per cent of additional fixed capital investment.
  • In order to encourage setting up industrial infrastructure in the form of industrial parks or estates through purchase of private or government land, 100 per cent reimbursement of the stamp duty and registration fees to be given against submission of equivalent bank guarantee from a nationalised bank, provided that the industrial park/estate will be set up within a period of three years of land allotment.

Other incentives on offer through the policy are:

  • Projects with a minimum capital investment of US$ 22 million or generating a minimum of 1,000 regular employments and having potential for development of ancillary industries based on their products, will be given mega-project status.
  • The units declared sick will be eligible for special incentives for revival, subject to fulfilment of the condition that the increase in the value of fixed capital assets in plant and machinery for revival of sick units should not be less than 25 percent.
  • A sick unit undertaking such relief shall be entitled to exemption of 99 per cent of tax payable under the Assam Value Added Tax Act, 2003, and the Central Sales Tax Act, 1956, for a period of three years and subject to maximum of 100 per cent of additional investment made for rehabilitation.

IT policy of Assam, 2009

The IT policy aims to facilitate the growth of IT sector by shifting priority on to the development of the sector through schemes to increase the awareness of IT. Under the policy all government officials/servants will be required to undertake training programmes in computer skill development. Another objective of the policy is to introduce programmes and schemes aimed at women's participation in IT sector, both, in terms of employment and entrepreneurship. Other objectives of the policy include:

  • To develop programmes and training modules for the less able and the challenged segments of the society, and provide employment opportunities for them in the IT and ITeS industry.
  • To set up ICT colleges and specialised training institutes in the private sector and the joint sector.
  • To promote e-tourism, e-commerce, e-education, telemedicine and related areas.
  • To promote and set up critical ICT infrastructure such as communication networks, IT parks, business process outsourcing (BPO) and knowledge cities and peripheral services through government and private partnerships.
  • To appoint consulting firms/institutes/reputed individuals to aid and advise the Government on IT, ICT and ITeS
  • To strengthen the Assam Electronics Development Corporation Limited (AMTRON), the state IT nodal agency, to enable it to partner meaningfully with the State Government to achieve the policy objectives.

The incentives on offer through the policy are:

  • All new as well as existing units undergoing expansion and/or diversification shall be eligible to claim VAT incentives as per the acts and rules of the Government of Assam
  • Power subsidy for a period of five years from the date of starting commercial production. The amount of subsidy shall be 50 per cent, subject to a ceiling of US$ 10,000 per year.
  • Companies engaged in IT software, telecommunication, ITeS and electronic/IT hardware manufacturing will be treated as industrial (and not commercial) units and electricity tariff applicable to industrial consumers will be levied.
  • Interest rate subsidy on working capital, at 30 per cent for a period of five years, subject to a maximum of US$ 10,000 million per unit or 20 per cent of the turnover, whichever is less.
  • Subsidy of 30 per cent on bandwidth for connectivity charges paid to the Internet service provider (ISP), for a period of three years from the date of starting commercial production or operation.
  • Subsidy on manpower development in respect of training/technical up-gradation /skill development of local persons in a registered training organisation/institution.
  • Special incentives for mega projects (projects with an investment of US$ 20 million and above).
  • Additional 10 per cent increase in all applicable fiscal incentives under this policy to be provided as early bird incentive for units coming up in the state during the first two years, subject to a ceiling of five units coming up in the IT space during this period.
  • In addition to the benefits provided to IT Industries, the following benefits shall be provided for ITeS and electronic/IT hardware manufacturing industries:
    • 100 per cent stamp duty exemption.
    • 100 per cent exemption on electricity duty.
    • Exemption from payment of entry taxes.
    • Double floor space index (FSI) and floor area ratio (FAR) for units built in IT parks/hardware parks.
    • Permission for working 24x7 a week.
    • No restrictions on employing women workers at late hours.
    • ITeS and electronic/ IT hardware manufacturing industries to be treated as essential services and continuous process units.
    • Unlimited captive and back-up power generation to be permitted.
    • Such units to be treated as independent power producers.

The North East Industrial and Investment Promotion Policy (NEIIPP), 2007

The North East Industrial and Investment Promotion Policy (NEIIPP), 2007, was implemented to promote the North East as an attractive investment destination through concessions and incentives.

The policy offers many incentives for potential investors:

  • Industries under this policy are eligible for incentives for a period of 10 years from the date of commencement of production
  • All new units as well as existing units that undergo substantial expansion (a minimum of 25 per cent increase in fixed capital) and start production before 2017 would qualify for state incentives.
  • Along with the NEIPP the North East Industrial Development Finance Corporation (NeDFI) will act as the nodal agency for disbursal of subsidies.
  • 100 per cent excise duty exemption on finished products made in the North East.
  • 100 per cent income tax exemption for industrial units.
  • Capital investment subsidy increased from 15 to 30 percent for plant and machinery up to US$ 360 000 per unit. For units above US$ 360 000 and up to US$ 7.5 million, an empowered committee approves. For units above US$ 7.5 million, the union cabinet approves.
  • Interest subsidy to be given at the rate of 3 per cent on working capital
  • 100 per cent reimbursement of insurance premium.

Bamboo and Cane policy 2005

This policy was introduced to promote and support the development of the bamboo sector in a comprehensive manner, through a multidisciplinary, multi-departmental and multi-dimensional integrated approach, to provide economic benefits to the people of the state.

The main features of the policy are:

  • Development and implementation of a sustainable, community-based production model and economic development program for bamboo with concomitant benefits for forest conservation.
  • Enhancing employment and income generating opportunities using bamboo and cane as the prime resources.
  • Protection and preservation of the ecosystem in the hilly areas, especially, protection of slopes and riverbanks, for sustained productivity.
  • Conservation of the bio-diversity, as a large number of endangered species use bamboo forest as habitat and depend on it for their food. All varieties of native bamboo species to be protected and germ-plasma preserved.
  • Capacity building in technical institutions, universities and colleges to support a higher level of bamboo-based activities.
  • Dissemination of technical and sector-specific knowledge and creation of awareness about the potential of bamboo and related economic opportunities.
  • Providing market analysis and support.

 

Doing Business in Assam

The approvals/ clearances and from whom they are required to start business in Assam are summarised in the following table:

List of approvals and clearances required

Departments to be consulted

Estimated time taken (days)

Power Assam State Electricity Board (ASEB) Low tension connection -30 to 107 days
High tension connection -34 to 114 days
Extra high tension connection -197 days
Pollution Pollution Control Board Non-polluting industries classified as green category: no approvals required
Sanction of incentive/concessions District level committee (for micro enterprises)
State level committee (for small scale undertakings)
AIDC Committee (for medium and large scale undertakings
Within 90 days
Incorporation of the company Registrar of companies Micro and small scale enterprises: same day
Other applications: within 90 days
Registration of new units under VAT Act: within 15 days of the receipt of application
Allotment of land/shed
  • A committee headed by Managing Director -Assam Industrial Infrastructure Development Corporation (AIIDC)/Assam Industrial Development Corporation (AIDC)/ Assam Small industries Development Corporation (ASDC) -will allot land/shed, up to one acre under their respective control, within the prescribed time period.
  • A nodal officer from Directorate of Industries and Commerce will be a member in the land allotment committee mentioned above.
  • Land requirement beyond the limits mentioned above will be allotted by a state-level committee chaired by Principal Secretary/Commissioner and Secretary, Industries and Commerce Department with representatives from Finance Department, Government of Assam and Revenue Department, Government of Assam.
  • Allotment of land up to one acre and shed up to 500 sq m in the industrial estates/ industrial areas/IIDC/growth centres, etc.: within 30 days
  • Others: within 60 days

 

More Information on Assam

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