The Government has recently announced the Rajasthan Investment Promotion Scheme (RIPS) 2010 for setting up of new enterprise, enterprises going for expansion, modernization and diversification, and projects set-up for common social good. All kinds of investments are eligible under this scheme. The new scheme also simplifies the procedure for grant and disbursement of subsidy, and introduces transparency in system, by introducing the system of online disbursement of subsidy.
The highlights of RIPS 2010 are as follows:
Subsidies
- Investment subsidy and Employment generation subsidy have been introduced.
- The maximum amount of subsidy shall be 50% of the tax deposited, i.e. VAT and CST or SGST (whenever introduced).
- RIPS 2010 provides investment subsidy to all eligible investors of an amount equal to 30% of the tax deposited, without any linkage with payment of interest and wages.
- Employment generation subsidy has been announced @
15,000 per employee/annum. For women, SC/ST and persons with disability this amount has been enhanced to 18,000 per employee/annum. - For entrepreneurs belonging to Women, SC/ST, or person with disability category, an additional investment subsidy amounting to 10% of the taxes deposited has been kept.
- These subsidies have been announced for 7 years, but to give boost to the MSMEs in the notified area, time limit has been extended to 10 years.
- Procedure for subsidy disbursement has been simplified by introducing a Challan for Adjustment through Treasury (Form VAT-37B).
Exemption from Taxes
The RIPS 2010 scheme announces exemption from payment of various taxes under the following categories of investment:
- New Enterprise and Project for Common Social Good
- Investment made for Modernization/Expansion/Diversification
- Sick Industrial Enterprise for its revival
The type, extent and period of exemption are as follows:
| Types of Exemption from Taxes/ Duties/ Charges | Extent of % of Exemption |
Period of Exemption |
| Luxury Tax | 100% |
7 years from the date of issuance of Entitlement Certificate. However for MSME located in the notified area the period of exemption shall be for 10 years. |
| Electricity Duty |
50% |
|
| Entertainment Tax |
50% |
|
| Land Tax |
50% |
|
| Mandi Fee |
50% |
|
| Stamp Duty on purchase or lease of land and construction/ improvement on such land |
50% |
One time for each such transaction for the same project. |
| Conversion charge payable for change of Land use |
50% |
In case of enterprises going for modernization/expansion/diversification, the exemption from payment of tax(es) shall be allowed only to the extent to which additional tax liabilities accrue due to utilization of additional capacity created after modernization/expansion/diversification.
