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India By State - Haryana - Taxation & Legalities




Taxation & Legalities

Policies & Incentives

Industrial Policies

The government believes infrastructure is the key factor in boosting the economic development and encourages private sector participation in developing the infrastructure. Industrial policy of 2005 focuses on several points:

The main keys include the development of the economy hubs and encouragement of private partnership in the development of infrastructure.

They want to focus on economic activities where the state enjoys comparative advantage (like food processing industry and IT). To end, they wish to develop the services sector (i.e. tourism, transport, education, health care services and financial services).

They create an investor-focused approach in administrative processes, strengthening the grievance redresses mechanism.

  • Providing subsidy to electronics units, agro and food processing units and projects being set up in backward areas
  • Exemption from payment of electricity duty for a period of 5 years to all new industrial units except those in the negative list
  • Project Approval Committee, which approves, modifies or rejects the application for setting up the SEZ
  • Exemption from payment of any tax, duty, fees, and other levies provided
  • The Developer is bound to provide Rehabilitation of population by providing built up houses, residential plots and amenities
  • Constitution of a state level steering committee, IT Prism, responsible for setting priorities for sectors to be taken up for computerization, reviewing progress of various government departments and approving budget
  • Setting up of a Separate Secretariat for Information Technology to monitor implementation of IT initiatives
  • Introduction of SMART Card based citizens ID with Multi-functions that enable citizens to interact with services, make payments online, act as a Voter ID, obtain ration card, passport, driving license and vehicle registration, etc.
  • Preferential treatment for allotment of land and power IT units in all industrial areas developed by state agencies
  • Total exemption from payment of electricity duty for captive power generation sets installed by the IT industry
  • Escort services and single desk clearance for obtaining easy clearances and approvals, with On-line clearance and support network linking all the related departments

In order to support the development of the IT sector, the state government came out with its IT Policy which was an attempt to replace the traditional delivery system of public services through private initiatives in provided critical infrastructure, systems framework and an enabling environment.

For this purpose, the following steps have been taken:

  • They constituted of a state-level steering committee - IT Prism - responsible for setting the priorities for sectors to be taken up for computerization, reviewing the progress of the IT action plan of various departments and approving their budgets and sanctioning posts for IT-related activities.
  • They set up a separate Secretariat for Information Technology to monitor the implementation of IT initiatives.
  • They set up a Facilitation Committee of government officials and representatives from the IT industry under the chairmanship of principal secretary to the chief minister, to coordinate and facilitate private investments.
  • They established IT initiative fund with an initial corpus of $2.1 million for e-governance, for developing replicable and reusable models of e-governance and applicable enabling technologies.
  • Total exemption from paying electricity duty for captive power generation sets installed by the IT industry.
  • Preferential treatment for allotment of land to IT units in all industrial areas developed by state agencies, along with continuous and uninterrupted power supply.
  • Escort services and single desk clearance for obtaining easy clearances and approval by various government departments for IT companies, with online clearance and support network linking all related departments.

Export promotion industrial park

This Park, along the Haryana-Delhi border, is meant for export oriented units in sectors like food processing, leather garments and accessories, electronics, telecommunications, automotives, auto parts, sports goods, handloom and ready-made garments

Food Parks

Food Parks have been set up at Saha in Ambala, Rai in Sonipat, Narwana and Dabwali, to provide necessary facilities for food processing and food packaging industry

Gems and Jewellery Park

Gems and Jewellery Park has been created at Udyog Vihar in Gurgaon to promote the gems and jewellery industry

Industrial Model Townships (IMT)

IMT Manesar is being developed as a prominent cluster of automobiles and auto components. It has industrial, residential, commercial and recreational facilities

Industrial Clusters

These include the scientific instruments cluster at Ambala, the metal industry cluster at Jagadhri, agricultural implements and rice milling clusters at Karnal, pharmaceutical cluster at Sonipat and chemicals cluster at Bahadurgarh

Warehouse Complex / Inland Container depots

The state has 3 Inland Container Depots (ICDs) located at Faridabad, Panipat and Rewari. Many more sector ICDs are coming up in the state

Special Economic Zone (SEZs)

Haryana has 8 notified SEZs, 29 SEZs with formal approval and 28 SEZs with in-principle approval.

I.T Policy

To support the development of the IT/ITES sectors, the state government came out with its IT Policy 2000 which was an attempt to replace the traditional delivery system of public services with IT-driven systems of governance through private initiatives in providing critical infrastructure, systems framework and an enabling environment. For this purpose, the following steps have been taken:

  • Constitution of a state-level steering committee - IT Prism - responsible for setting the priorities for sectors to be taken up for computerisation, reviewing the progress of the IT action plan of various departments and approving their budgets and sanctioning posts for IT-related activities;
  • Setting up a separate Secretariat for Information Technology to monitor the implementation of IT initiatives.
  • Setting up a Facilitation Committee of government officials and representatives from the IT industry under the chairmanship of principal secretary to the chief minister, to coordinate and facilitate private investments
  • Establishing IT initiative fund with an initial corpus of $2.1 million for e-governance, for developing replicable and reusable models of e-governance and applicable enabling technologies
  • Total exemption from paying electricity duty for captive power generation sets installed by the IT industry
  • Preferential treatment for allotment of land to IT units in all industrial areas developed by state agencies, along with continuous and uninterrupted power supply
  • Escort services and single desk clearance for obtaining easy clearances and approval by various government departments for IT companies, with online clearance and support network linking all related departments.

The state's Labour Policy has declared the IT industry as a public utility service, which prevents the occurrence of strikes as well as lockouts without due notice.

Incentives

Industrial incentives

Tax incentives and exemptions

  • Investment subsidies and other incentives
  • Availability of finance at cost effective terms
  • Incentives for FDI
  • Profitability and incentives to industry

Scheme of Incentives and Concessions

In order to attract domestic as well as foreign direct investment, the state aims to provide following incentives to the new industrial units:In order to attract domestic as well as foreign direct investment, the state aims to provide following incentives to the new industrial units:

  • Incentives for mega projects in backward areas
  • Incentives for Small Scale Industries in backward areas
  • Incentives for Exporting Oriented Units (Eons)
  • Incentives for food processing industries

The new schemes of incentives are applicable to units in commercial production after the commencement of this policy. However, export incentives shall be provided to existing units as well.

 

Doing Business in Haryana

An indicative list of approvals with timeframe for setting up business in Haryana

Department

Timelines

Environment Site/environment clearance: 60 days
No Objection Certificate to establish: 7 days
No Objection Certificate to operate: 21 days
Renewal of consent: 30 days
Industries Letter of intent/industrial licence: 15 days
Permanent registration as SSI: 7 days
Grant benefit of sales tax concessions: 90 days
Incentives Sanction at local level: 30 days
Sanction at Head Quarter/state level: 45 days
Medical and Health Drug Licence: 30 days
Electricity Loads up to 20 KW: 36 days
Loads up to 70 KW: 66 days
Loads above 250 KW: 90 days
Load above 1 MW: 105 days
Revenue Allotment of Plot: 30 days
Change of Industrial Land: 30-60 days
HSIDC/HFC Sanction of loan: 30-45 days
Allotment of plot in industrial areas: Off the shelf

Source: Government of Haryana, PwC research

 

Cost of setting up business

An indicative table on cost of setting up business in Haryana

Indicator

Value (in US$)

Industrial land (per sq metre) 28.7 - 67
Office space rent (per sq ft per month) Gurgaon: 0.31 - 0.74
Residential rent (for a 2,000 sq metre house, per month) 287 - 478
5-star hotel room (per night) 80.4
Electricity (per kWh) Commercial & Industrial: 0.096
Water (per 1000 litres) Commercial & Industrial: 0.096

Source: PwC research
Note: Exchange rate used is INR 47 per US$

 

More Information on Haryana

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