Investments in land, building, second hand machines, raw material out of PLI eligibility

The government on Friday said that the application window for the production linked incentive (PLI) for white goods that includes ACs and LED lights is June 15- September 15, 2021 as it laid down strict eligibility criteria for investments to determine the eligibility of companies to avail benefits of the programme.

As per the guidelines issued by the Department for Promotion of Industry and Internal Trade (DPIIT), investments made in land and building required for a project or setting up of a manufacturing unit will not be covered under the scheme for ACs, and LED lights and it would not be considered for determining eligibility of a company. Similarly, expenditure on consumables and raw material used for manufacturing, and second hand/used refurbished plant, machinery equipment, too would not be considered investment.

Investment will include expenditure incurred on new plant, machinery, equipment and associated utilities, research and development, and transfer of technology relating to the facilities setup for the products.

The Rs 6,238-crore PLI scheme will be implemented over five years from FY22-FY29 and extend an incentive of 4-6% on incremental sales of goods made in India.

Eligible Investment made in terms of scheme guidelines on April 1, 2021 or thereafter, shall be reckoned for considering the incentive under the scheme. The scheme will be implemented through a project management agency (PMA) which would be responsible for providing secretarial,managerial and implementation support. It proposes

As per the guidelines, only eligible applicants can apply to avail the benefits of the scheme and the guidelines have elaborate properly about investments for determining eligibility. It covers compressors, copper tubes, motors, valves and heat exchangers, LED chips, integrated circuits and fuses among others.

The DPIIT said that the eligibility will be subject to achievement of thresholds of net incremental sales of the products for the respective financial year over the base year (2019-20) and cumulative incremental investment in the preceding fiscal year. Net worth of of 30% of the threshold investment and a global manufacturing revenue worth five times of threshold investment for ‘Large Investment’ category and four times for ‘Normal Investment’ category are pre-qualification criteria.

“Investment in land and building (including factory building or construction) required for the project or unit will not be covered under the scheme and therefore shall not be considered for determining eligibility under the scheme,” DPIIT said.

It added that expenditure on consumables and raw material used for manufacturing shall not be considered as investment.

“No second hand/used refurbished plant, machinery equipment, utilities shall be used to manufacture the eligible product,” the department said.

It said that in case an applicant does not meet criteria of threshold investment and threshold net incremental sales for any given year, it would not be eligible for disbursement of incentive for that particular financial year.

Further, investment in R&D have been capped at 15% of the total committed investment.

Applicants will have to submit a claim for disbursement of incentive on an annual basis for the sales made in a financial year along with audited financial statements, according to the guidelines.

In the application form, an applicant would have to provide information such as shareholding pattern, committed cumulative investment, details of board of directors and key management personnel, promoter, and annual plan for domestic value addition, and details of each group company.



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