MAHARASHTRA’S PACKAGE SCHEME OF INCENTIVES 

SICOM has been instrumental in the formulation of the Package Scheme of Incentives over 30 years ago. The organization has been associated with every revision that has occurred in the package since then. The incentives are available to small, medium and large scale units in the Private sector, State Public Sector, Joint Sector and Co-operative sector. As per a recent ammendment in the scheme, industrial units applying for incentives will not be eligible to claim any sales tax incentives.

The salient features of the Package Scheme are listed below:

Area Classification
Maharashtra State has been classified into A, B, C, D and D+ areas for purposes of incentives. This classification is based mainly on the degree of development in that particular area. Thus a highly developed area is classified ‘A’ and a least developed area is classified as ‘D+’.  



Industrial Units in the areas classified as B, C, D and D+ are offered incentives on graded scales in the ascending order, according to size of investments in the category of Small Scale (investment in plant and machinery not exceeding Rs.30 million), Medium and Large Scale units. 

Implementing Agency
Industries Department is the implementing agency for all projects in Medium and Large Scale and NRI sponsored projects.

Implementing agencies for small-scale projects are the District Industry Centers located at the district headquarters of all the districts in Maharashtra. 

Maharashtra State Financial Corporation (MSFC) is the disbursement & monitoring authority for SSI units financed by it. 

Maharashtra Tourism Development Corporation(MTDC) is the monitoring agency for tourism projects in the state 

Exemption from Electricity Duty :

    New industries establishing in C, D, and D+ areas and No-industry District(s) will be exempted from payment of Electricity Duty for a period of 15 years. In other parts of the State, 100% Export Oriented Units (EOUs), Information Technology (IT) and Bio-technology (BT) units, and industries setting up in Special Economic Zone (SEZs), and Electronic Hardware Technology Parks will be exempted from payment of Electricity Duty for a period of 10 years.

Waiver of Stamp Duty and Registration Fees :

    At present, IT units in public IT Parks are exempted form Stamp Duty and Registration fees upto 31st March, 2006. Now all new industrial units (including IT and BT units) and expansions, will be exempted from payment of Stamp Duty and Registration fess upto 31st March, 2006 in C, D and D+ areas and No-industry District(s). However, 50% of the Stamp Duty and Registration fees will be waived for IT units set up in other IT Parks in talukas/areas in the State in "A" and "B" categories.


Octroi Refund :

    The scheme of refund of octroi provided under the Package Scheme of Incentives, 1993 will be included in the new Scheme up to 31st March, 2006 on the same pattern. Where account-based cess or other levy is charged instead of or in lieu of octroi, such charge will also be eligible for refund as in the case of octroi.

Incentives to SSI units :
   1 Special Capital Incentives for SSI units :

    New small-scale industries (including IT and BT units) setting up in difference parts of the State will be eligible for Capital Subsidy as follows :

Taluka/Area Classification Ceiling as percentage of fixed capital investment Monetary ceiling (Rupees in lacs)
A   - -
B   - -
C   20 10
D   30 20
D+ 35 25
No Industry District 40 35



The subsidy will be disbursed in equal annual installments over 5 years. Existing SSI and small-scale IT and BT units will be eligible for 75% of the subsidy admissible as above for expansion, diversification or modernization involving additional investment to the extent of 25% or more.

   2 Interest Subsidy to new textile, hosiery and knitwear SSI units

    New textile, hosiery and knitwear small-scale industries setting up in different parts of the State will also be eligible for Interest subsidy on the interest actually paid to the financial institution/bank on the term loan for creating fixed capital assets, equal to the interest payable at 5% per annum as stated in the table below. The monetary ceiling will be applicable for the complete period of eligibility.

Taluka/Area Classification Monetary ceiling (Rupees in lacs) Maximum period in years
A   - -
B   - -
C   10 4
D    20 5
D+ 25 6
No Industry District 35 7


Development of non-conventional energy :

    In order to give an impetus to the development of non-conventional energy, such projects will be eligible for benefits under the new Package Scheme of Incentives.

Classification of talukas/areas :

    The present classification of different talukas/areas in the State in A, B, C, D and D+ categories on the basis of their level of development is contained in the Package Scheme of Incentives, 1993, and will continue for the present. The matter of revision of the area classification will be separately considered by a Committee under the Chairmanship of the Minister (Industries). Norms for the mid-term reclassification of talukas depending on changes in their development status will also be considered, and No Industry District(s) will be separately categorized.

Financing of capital incentives and refunds under the Package Scheme :

    A budgetary provision of at least Rs. 200 crores will be made each year from 2001-2002 onwards to meet past commitments and the incentives under the new Scheme. Additional resources will also be raised through bonds linked with Sales Tax repayments under past Schemes.

Exemption from Sales Tax for Khadi Village Industries :

    24 khadi and village industries are exempt from Sales Tax up to Rs. 20 lakhs per annum. Considering the potential of the sector for employment generation and rural industrialization, Sales Tax will also be waived in respect of the 72 remaining industries. this concession would be available to khadi and village industry units registered with and assisted by the Maharashtra State Khadi and Village Industries Board.

Sales Tax on IT products :

    Up to 31st March, 2006 the Sales Tax rates on IT products would be maintained at the level of the minimum floor rates, wherever applicable. No turn-over tax, additional Sales Tax, surcharge of any other additional levy related to Sales Tax shall be applied to IT products.

Sick SSI units :

    Issues relating to the rehabilitation of sick SSI units are reviewed in the State-Level Institutional Committee and Sub Committee which have been set-up as an adjunct of the Zilla Udyog Mitras. Sick SSI units taken up for nursing by the banks and financial institutions are at present eligible for re-schedulement of arrears of Government and electricity dues, to be repaid in 36 monthly installments at 13% interest. The interest rate on the rescheduled arrears will now be reduced to 10%, in all except 'A' areas of the State. The repayment of such arrears would be allowed in 60 monthly installments.

Stamp Duty on Corporate Restructuring :

    The stamp duty for demerger of companies as defined under section 2(19-A-A) of Income Tax Act, 1961 will be made applicable on lines of the stamp duty structure applicable for amalgamation of companies under every order made by the High Court under section 394 of the Companies Act, 1956.

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