Gujarat Industrial Policy 2000

Insertion of additional items of production
in the Sale Tax Eligibility Certificate.

With a view to avoiding inter-state competition and to introducing uniform rates of sale tax in all the states, as per the decision taken jointly by the central Government in consultation with the  state Governments, the state Government has discontinued to offer new incentives of sale tax from 1/1/2000. In the context of globalisation, industries have to stand in the international market   to face the challenges of competition. It therefore becomes essential that established industries should adopt modern technology and make changes in their productions,  in order to sustain in this international market. It is a challenge to make production cheap and as per the demand / requirement of the world for being competitive. In this process,   additional items of production will have to be introduced by making a technological changes in the established plant. In order therefore that the investment made in the State is useful, the items produced in the state are sold as against   the competition arising from the goods dumped from the the international market. In this context the investment already made maintains its productivity, separate consideration for these projects should be made. At present, the projects already established or the projects in the pipeline are eligible for sales tax incentives against the eligible investment made. If these projects during the period of availing of sales tax incentives commence the manufacture of new items and if they are offered incentives within the overall ceiling of the incentives sanctioned, they will be able  to maintain their health instead of falling sick due to competition. This matter has been considered in the Industrial Policy 2000 and in this context, it has been resolved to implement a scheme to permit insertion of new items of production in the existing list of items of production for which the incentives have been sanctioned.   

2. Definitions

Sale Tax Eligibility Certificate

Sale tax eligibility certificate given to an industrial unit by the office of the Industries Commissioner   and  District Industries Center in regard to sales tax incentives schemes for the period 1986-91, 1990-95 and 1995-2000.

3. Eligibility and Rates

1. This schemes shall be limited only for eligiblity certificates given under sales tax incentives schemes of 1986-91, 1990-95 and 1995-2000. In addition to the items under production, as shown in the eligibility certificates referred to above in para(2), if the unit starts manufacturing or will manufacture new items by making changes in production process, with or without additional investment, then such items shall be permitted to be included in the sale tax eligibility certificate. For these new items, the office of the industries Commissioner will give supplementary eligibility certificate separately. The sale of items mentioned in this eligibility certificate will be subject to the same quantum of incentives and the time limit sanctioned earlier.
2. Additional fixed capital investment or current investment made if any, for the manufacture of additional items shall not be considered eligible for incentives.
3. No addition or alteration shall be made in the financial limit or the time-limit of sales tax incentives as mentioned in the eligibility  certificate and as granted under the relevant scheme.
4. The industrial unit holding sale tax eligibility  certificate shall be entitled for incentives of sale tax from the date, it has started production of new items.
5. The unit shall have to pay sale tax at the rate of 25 % of rate of the sales tax levied on new item/s. The balance 75 % of sales tax will be permitted to be availed of as incentives within the overall ceiling of quantum and time period as sanctioned earlier.
6. The unit shall have to continue the production constantly.
7. The benefit under this  Resolution shall not be extended  to the units which have already taken full benefit of incentives in terms of quantum or whose time limit is already over.

4. Procedure

Under the scheme, the industrial unit shall in case of small scale industry, apply to the District Industries Center and in case of medium/large unit to the office of the Industries Commissioner along with necessary enclosures. The Industries Commissioner or the General Manager of District Industries Center shall scrutinize the application and present it before the State Level Committee / District Level Committee for sanctioning insertion of  additional items in the eligibility certificate of the concerned  unit. As per the decision of the Committee, new item shall be inserted and the Committee shall forward a copy of this supplementary eligibility certificate to the concerned office of the sale tax department. The sale tax department shall implement this amendment subject to the prevailing act  in this regard. The constitution of the State Level Committee and District Level Committee shall be the same as per the provision made in Resolution No APN-102000 – 17(1)- I, dated 14/11/2000 (Interest subsidy and cash subsidy to small scale Industries – scheme 2000)

The unit shall fulfill  all the conditions of its eligibility certificate. It will also file the returns of the sales tax  to the sale tax department on prescribed date(s).