Gujarat offers 100% subsidy on CST under new electronics policy

The Gujarat government has made a generous move to encourage electronics manufacturing in the State.

As per the newly announced electronics policy, among other sops, the Government will offer 100 per cent subsidy on Central Sales Tax (CST) and VAT refund equal to 90 per cent of capital investment made for expansion of the existing manufacturing units.

The Government plans to generate employment for about 5 lakh people under the new policy, which aims to attract investment of about $6 billion (around ₹3,600 crore) by 2020 and generate business worth $16 billion (around ₹9,600 crore).

Releasing the policy document for 2014-19, Chief Minister Anandiben Patel maintained that the policy aims to make Gujarat a globally-recognised hub for the Electronics System Design and Manufacturing (ESDM) industry. The move is aimed at creating a dedicated Gujarat Electronics Mission, under which electronics hardware manufacturing will be encouraged. For this, the policy includes subsidies for fresh investment in the clusters; interest subsidy of 7 per cent and 2 per cent for MSMEs and large units respectively; complete waiver of electricity duty for the initial five years with subsidised power tariff at ₹1 per unit. Additionally, R&D will get special encouragement with 50 per cent subsidy of the total project cost upto ₹50 lakh.

Ministers Nitin Patel and Saurabh Patel informed that the new policy aims to focus on G2B — government to business. Considering the growth of electronics sector in the country, the import of electronic goods is expected to surpass that of petroleum products by 2020.

Hence, the new policy takes into account these aspects and creates an environment to manufacture in India, they said.

The State plans to create infrastructure to develop semi-conductor fabrication units. Also, the policy aims to develop green field and brown field electronics manufacturing clusters in the State.

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