Gujarat Textile Policy: Capital Subsidy (Fiscal Incentives to Labour Intensive Unit)

Description
The "Gujarat Textile Policy" is an umbrella scheme introduced by the Industries and Mines Department, Gujarat. It aimed at augmenting investments in the textile sector and strengthening the textile value chain across each sub-sector, while also focusing on strengthening the garments and apparel as well as technical textiles industry. Effective from October 1st, 2024 to September 29th, 2029, this initiative focuses on reducing the carbon footprint and promoting green growth, thereby making the sector globally competitive and environmentally sustainable. The component "Capital Subsidy Fiscal Incentives to Labour Intensive Unit " provides financial assistance to eligible industrial units through subsidies on their capital expenditures. The subsidy is granted based on the category of the location and the type of activity undertaken.

Definitions
Gross Fixed Capital Investment
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Eligible Fixed Capital Investment
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Ineligible Capital Expenditure/Assets
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Term Loan
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Date of Commercial Production (DoCP)
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Benefits
• Financial Assistance:
• Note:
• Eligible Fixed Capital Investment: Eligible Fixed Capital Investment (eFCI) means the following components of investment made during the Eligible Investment Period.
• If Industrial Unit is availing Capital Subsidy under any scheme of Central Government, then total quantum of Capital Subsidy from State and Central Government, in any case shall not exceed the total term loan amount disbursed.

Eligibility Criteria
1. The industrial unit must be recognized as a Labour Intensive Unit.
2. The industrial unit must have availed a Term Loan for the project.
3. The unit must commence commercial production before applying for subsidy disbursement.
4. The unit must apply within one year from the Date of Commercial Production (DoCP).
5. The total subsidy received (State + Central) should not exceed the total term loan amount disbursed.
6. <br>
7. > **Eligible Activities:**
8. **Activity 1:**
9. - Garments, Apparel & Made-ups, Technical Textiles Activity (including Composite Unit)
10. **Activity 2:**
11. - Weaving (with or without preparatory), Knitting, Dyeing & Processing, Texturising, Twisting, Embroidery and MMF Spinning to manufacture yarn from Polyester Staple Fiber (PSF) / Viscose Staple Fiber (VSF) (excluding Spinning activity of Cotton and Synthetic Filament Yarn).
12. > **Labour Intensive Unit:**
13. Labour Intensive Unit means a new industrial unit that provides minimum employment to 4000 (four thousand) persons duly registered under EPF scheme, out of which minimum female employee should be at least 1000 (one thousand). The existing unit that carrying out expansion/diversification of activities , during the operative period of the scheme and provides totally new employment to minimum 4000 (four thousand) persons duly registered under EPF scheme, out of which minimum female employee should be at least 1000 (one thousand).

Required Documents
• Document of registration of the industrial undertaking, as applicable under law, and the Industrial Entrepreneur Memorandum, as prescribed by the Government of India.
• Documents related to legal possession of land with valid non-agriculture permission for industrial use, and registered purchase / Lease / Rent deed. If the plot or shed is in GIDC estate, a copy of the possession letter should be attached.
• Consent to Establish from GPCB, if applicable.
• Detailed Project Report containing the following:
• Term loan sanction letter from financial institution(s)
• Board Resolution / Authority Letter / PoA
• PAN Card of Enterprise and Authorized Person
• GST Registration with all attachments.
• First Sale Bill ( In case of Commercial Production is commenced)
• Audit Report (Before initiation of Expansion)

Frequently Asked Questions
Q: What is the "Gujarat Textile Policy"?
A: The "Gujarat Textile Policy" is a government initiative aimed at strengthening the textile sector by promoting investment, sustainability, employment generation, and value chain integration.

Q: What is the operative period of the "Gujarat Textile Policy"?
A: The operative period of the Gujarat Textile Policy 2024 is from October 1, 2024, to September 30, 2029, covering a span of five years.

Q: How does the policy contribute to employment generation?
A: The policy focuses on creating a robust textile ecosystem by attracting investments, encouraging MSMEs, supporting women entrepreneurs, and expanding production capacities, thereby generating employment opportunities.

Q: What incentives are provided under the policy?
A: The policy offers financial assistance, infrastructure support, and subsidies to strengthen textile manufacturing, encourage investment, and support MSMEs, startups, and large enterprises.

Q: What is the objective of the "Capital Subsidy (Fiscal Incentives to Labour Intensive Unit)" component?
A: The component is a financial assistance program that provides subsidies to Labour Intensive Units based on their fixed capital investment.

Q: Who is eligible to apply for this subsidy?
A: Labour Intensive Units that have availed a term loan and meet the eligibility criteria specified in the scheme are eligible to apply for the subsidy.

Q: What is the maximum subsidy amount that an industrial unit can receive?
A: The maximum subsidy amount varies based on the category of the Taluka and activity type, with a maximum limit of [?]150,00,00,000/-.

Q: When will the subsidy be disbursed to the industrial unit?
A: The subsidy will be disbursed in 5 equal annual installments after the commencement of commercial production.

Q: Can an industrial unit apply for the subsidy if the term loan is sanctioned after one year from the Date of Commercial Production (DoCP)?
A: No, an industrial unit will not be eligible for the Capital Subsidy if the term loan is sanctioned more than one year after the DoCP.

Q: Can an industrial unit avail the Capital Subsidy if it is already receiving a subsidy from the Central Government?
A: Yes, an industrial unit can avail the subsidy; however, the total subsidy from both the State and Central Governments should not exceed the total term loan amount disbursed.

Q: Is it mandatory for a Labour Intensive Unit to register under the EPF scheme?
A: Yes, it is mandatory for all employees of the Labour Intensive Unit to be registered under the EPF scheme to qualify for the benefits of this component.