Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Assistance for Interest Subsidy (Service Sector)

Description
The "Scheme for Assistance to Micro, Small and Medium Enterprises MSME " is an umbrella scheme launched by the Industries and Mines Department, Gujarat. It aims to empower the state& 39;s dynamic MSME sector, which significantly contributes to employment, GDP, and exports. Effective from August 7th, 2020 to August 6th, 2025, this initiative supports entrepreneurs and strengthens MSMEs, making them globally competitive. The component "Assistance for Interest Subsidy Service Sector " provides interest subsidies on term loans for new MSMEs in the service sector. The subsidy applies to new machinery, equipment, and furniture/fixtures excluding land and buildings .

Exclusions
• Loan sanctioned by Non-Banking Financial Institutes will not be eligible for incentives under this resolution.

Definitions
Micro, Small and Medium Enterprise
(Source: https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)

New Enterprise
(Source: https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)

Existing Enterprise
(Source: https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)

Expansion
(Source: https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)

Gross Fixed Capital Investment (GFCI)
(Source: https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)

Forward integration, Backward Integration and Diversification
(Source: https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)

Term Loan
(Source: https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)

Pipeline Enterprises

Benefits
• Financial Assistance:
• Additional Subsidy: 1% extra interest subsidy for registered startups in the service sector with Udyam/MSME Registration.

Eligibility Criteria
1. The firm must be a new Micro/Small/Medium enterprise.
2. The enterprise must be in the service sector (listed in [Annexure A & B](https://ic.gujarat.gov.in/documents/commondoc/2020/3-GR_02092020.pdf)) are eligible. 1. The term loan must be sanctioned by a recognized Bank/Financial Institution.
3. The enterprise must apply within one year of loan disbursement or before the commercial production starts.
4. The enterprise must remain operational for at least 7 years post-subsidy approval.
5. The enterprise must comply with pollution control measures.
6. Only one type of investment (Forward Integration, Backward Integration, Diversification, or Expansion) will be eligible for subsidy.

Application Process
Step 1: Step-1: Visit the Investor Facilitation Portal (IFP) portal. Click on "New Investor Registration" to access the registration form.
Step-2: Fill in the Registration Form. Click on "Submit".
Step-3: Verify the E-mail ID using the link sent on your r…
Online

Step-1: Visit the Investor Facilitation Portal (IFP) portal. Click on "New Investor Registration" to access the registration form.
Step-2: Fill in the Registration Form. Click on "Submit".
Step-3: Verify the E-mail ID using the link sent on your registered E-mail ID.
Step-4: After verification, you will be registered successfully.
Step-1: Visit the Investor Facilitation Portal (IFP) portal. Click on "Login".
Step-2: Enter the email address and password you used during registration.
Step-3: Click the "Login" button to access your account.
Step-4: Now fill in the required details and mandatory documents about your business to complete the application process.

Required Documents
• Printed copy of the application along with declaration and undertaking in the application form signed by an authorized person, including their designation and name with the enterprise's stamp.
• Copy of acknowledgment of Udyog Aadhaar / Udyam Registration.
• Copy of term loan sanction letter.
• Copy of term loan account statement / bank certification of first disbursement certificate.
• Copy of the constitution of the enterprise (registered partnership deed for partnerships).
• Copy of DPR of the enterprise (for projects up to ₹5 crores); for projects above ₹5 crores, DIC will ask for a bank appraisal report.
• Shop & Establishment Certificate (for service sector enterprises in municipal corporations).
• Copy of GST registration (if applicable).
• Copy of PAN card of the enterprise.
• Copy of ITR for the last financial year showing plant & machinery value (new enterprises must submit a self-declaration for the first time).
• Copy of birth certificate/school leaving certificate (for entrepreneurs under 35 years as of the bank loan sanction date).
• Copy of caste certificate from a competent authority.
• Copy of certificate for differently abled persons from a competent authority.
• Copy of CTE issued by the GPCB (if applicable).
• Self-certified/certified copy of documents such as 7/12 Utara, Namuna 6, copy of index, property card, etc. (any one).
• NA permission (if applicable).
• Copy of notarized rent deed (agreement) with the owner's proof/affidavit for ownership of land/property.
• Copy of lease deed (agreement) with the owner's proof of ownership of land/property.
• Copy of the property tax receipt (for service activities).
• Board resolution for signing authority (in case of partnerships, LLPs, Pvt. Ltd., or Limited Companies).
• Declaration and undertaking regarding other investments in Gujarat.
• Annexure of the balance sheet showing the gross fixed capital investment of the previous financial year.
• CA certificate showing the gross fixed capital investment before initiating expansion/diversification/forward or backward integration.

Frequently Asked Questions
Q: What is the "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)"?
A: The "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)" aims to position Gujarat as a global business destination by promoting sustainable manufacturing, inclusive development, and balanced regional growth.

Q: What is the duration of the scheme?
A: The scheme is effective from August 7, 2020, and will remain in operation until August 6, 2025.

Q: What is the objective of the component "Assistance for Interest Subsidy (Service Sector)"?
A: The component "Assistance for Interest Subsidy (Service Sector)" provides interest subsidies on term loans for new MSMEs in the service sector. The subsidy applies to new machinery, equipment, and furniture/fixtures (excluding land and buildings).

Q: Who is eligible to apply for the interest subsidy under this scheme?
A: Only new MSMEs in the service sector, as listed in Annexure A & B, are eligible to apply for the interest subsidy.

Q: What is the maximum amount of interest subsidy an enterprise can receive?
A: The maximum interest subsidy varies by location, with the highest being ₹35,00,000/- per annum for up to 7 years.

Q: Can an existing MSME apply for this subsidy?
A: Existing MSMEs are not eligible unless they invest at least 25% in expansion, diversification, or integration, with a minimum of 60% investment in plant and machinery.

Q: Is it mandatory for an enterprise to have GST registration to qualify for the subsidy?
A: Yes, GST registration is a mandatory requirement for eligibility under this scheme.

Q: Can an enterprise avail the subsidy if the loan is taken from an NBFC?
A: No, only loans sanctioned by banks or financial institutions following RBI guidelines are eligible for the subsidy.

Q: What happens if an enterprise shuts down before completing 7 years of operation?
A: If an enterprise ceases operations before 7 years, the subsidy amount disbursed will be recovered as arrears of land revenue.

Q: Can an enterprise avail this subsidy while also receiving a similar subsidy from the Central Government?
A: Yes, an enterprise can avail both subsidies, but the total subsidy amount (State + Central) cannot exceed the total interest paid on the loan.

Q: Is it necessary for an enterprise to have a shop and establishment registration?
A: Yes, if the enterprise is located in a municipal area, it must obtain a shop and establishment registration.

Q: Will the subsidy cover penalties or additional bank charges on the loan?
A: No, the subsidy only covers standard interest on the term loan and does not include penalties or other bank charges.

Q: Do registered startups receive any additional benefits under this scheme?
A: Yes, startups with Udyam registration receive an additional 1% interest subsidy.