Payroll Subsidy

Description
The scheme "Payroll Subsidy" by the Micro Small and Medium Enterprises Department, Government of Tamil Nadu, is introduced with the objective of assisting MSMEs in reducing their employee cost. The scheme provides reimbursement of employee's contributions to the EPF for their employees for the first three years from the date of commencement of commercial production, subject to a maximum of ₹ 24,000/- per employee per annum.

Exclusions
• > **Following list of Manufacturing Enterprises/activities are not eligible -**
• Sugar.
• Distilleries, brewery and malt extraction.
• Units utilizing Molasses/ rectified spirit/ de-natured spirit as raw material for manufacture of potable alcohol.
• Fertiliser (except bio-fertilisers).
• Mining and quarrying.
• Iron and steel smelting.
• Beedis/ cigarettes/ cigars/ gutka and tobacco-based products.
• All types of Saw Mills.
• Cement.
• Aluminium smelting.
• Calcium carbide.
• Slaughter house.
• Re-packing of drugs/ medicine/ chemical, without any processing or value addition.
• Azoic/ reactive dyes.
• Fire cracker.
• Industries manufacturing and or utilizing Ozone depleting substances.
• Poultry.
• Cyanide.
• Caustic soda.
• Potassium chloride.
• Nylon fibre.
• Rayon fibre.
• Polyester fibre.
• One-time use and throw away plastics.
• All service MSMEs.
• Any other enterprise/ activity as may be notified by the Government.

Benefits
• Reimbursement of employee's contribution to the EPF for their employees for the first three years from the date of commencement of commercial production, subject to a maximum of ₹ 24,000/- per employee per annum.

Eligibility Criteria
1. - All micro enterprises anywhere in the state of Tamil Nadu.
2. - Small and medium enterprises set up in 254 [industrially backward blocks](https://www.msmeonline.tn.gov.in/images/TN_Schemes_Booklet_Draft_09072022_v10.pdf) and all industrial estates promoted by the Government and the Government agencies like SIPCOT, TANSIDCO etc.- Agro-based small and medium enterprises set up in all 388 blocks of the state.
3. - The unit should have employed more than 20 persons. Only regular workers will be taken into account. Casual, temporary or contract workers will not be taken into account.
4. - If the employee strength falls below 20 for any of the months, the claim will be restricted to the months in which the conditions are satisfied.
5. <br>
6. Check Your Eligibility for this scheme [here](https://www.msmeonline.tn.gov.in/incentives/know_your_eligibility.php)

Application Process
Step 1: Visit the Official Website/Portal of the Micro, Small, and Medium Enterprises Department of the Government of Tamil Nadu. In the top ribbon, click "Login / Registration".
Online
In the registration form, fill in the mandatory details accurately, Name, Date of Birth, Aadhaar Number, Email ID, and Mobile Number. Create a new password. The password must contain a minimum of 8 characters, 1 Upper Case Letter, 1 Lower Case Letter, and 1 Numeric Field.
Fill in the captcha code, and click "Register".
Visit the Login Page and click "Login", and then fill in the credentials received on your registered Email ID and the registered Mobile Number.
After successfully logging in, hover over "Schemes" in the top ribbon, and then click on the concerned scheme from the dropdown.
On the next page, hover over "Apply Online" in the top ribbon, and then click on "New Application" from the dropdown.
Fill in all the mandatory fields of the Application Form. Carefully review all the information provided, acknowledge and agree to the terms and conditions, declaration, and privacy policy, and then click "Proceed".
Note down the reference number appearing on the screen and then click "Close".
Now, hover over "Schemes" in the top ribbon, and then click "Upload Documents" from the dropdown.
On the next page, provide the Application ID and click "Submit".
On the next page, upload all the mandatory documents in the specified format and size.
After uploading the documents, click "View" to verify the documents uploaded for correctness.
Fill in all the checkboxes appearing at the bottom of the screen and then click "Submit Application".
The message regarding the submission of the online application to GM/DIC / RJD will be received on your mobile phone.
(Optional)

Step 2: Step 6: Track Application Status
Online
You can check the status of your application here. The portal may provide updates via email or SMS regarding your application status.
Within 3 months after the completion of the financial year for the claim of the previous year.

Required Documents
• Copy of UDYAM Registration Certificate.
• Attested Copy of TANGEDCO Meter Card.
• If the Enterprise is functioning in its own land, Copy of the Land Purchase Deed, duly signed by the applicant.
• If the Enterprise is functioning in a leased land/building, Copy of the Lease Agreement Deed executed on stamp paper of ₹ 100/-, for a minimum period of 11 months from the date of commencement of commercial production.
• Copy of Machinery Invoice.
• Copy of First Sale Invoice raised after the Commencement of Commercial Production.
• Copy of Returns filed under the Employees Provident Fund 1952.
• Copy of NOC [No Objection Certificate].
• Copy of Tax Receipt.

Frequently Asked Questions
Q: Is the size of the documents for application restricted?
A: Yes, the file size should be less than 200 kb, and the file type should be PDF (.pdf).

Q: When should an enterprise file an application for the previous year's claim?
A: The application must be filed within 3 months after the completion of the financial year for the previous year's claim.

Q: Are service MSMEs eligible for the subsidy?
A: No, all service MSMEs are excluded from the Payroll Subsidy scheme.

Q: Can additional enterprises be excluded by the government?
A: Yes, any other enterprise or activity may be notified by the Government for exclusion.

Q: What evidence is required for employee employment verification?
A: The evidence includes statutory returns like those filed under the Employee Provident Fund Act, 1952.

Q: How is employee strength monitored for eligibility?
A: The claim considers only regular workers, and if employee strength falls below 20 for any month, the claim is restricted to the qualifying months.

Q: Can enterprises outside industrially backward blocks apply for the scheme?
A: Yes, all micro enterprises in the state of Tamil Nadu are eligible, irrespective of their location.

Q: Is there a limit on the number of employees for eligibility?
A: Yes, the unit should have employed more than 20 persons to qualify for the Payroll Subsidy scheme.

Q: When does the reimbursement period start for commercial production?
A: Reimbursement starts from the date of commencement of commercial production and covers the first three years.

Q: What is the maximum reimbursement amount per employee under the Payroll Subsidy scheme?
A: The scheme provides a maximum reimbursement of [?]24,000 per employee per annum for their EPF contributions in the first three years.

Q: Are temporary or contract workers considered for the subsidy?
A: No, only regular workers are considered. Casual, temporary, or contract workers are not included in the scheme.