Getting Govt. Subsidies – Amount Saving Formula

Planning to start a new business? First thing that comes up in mind is the large investments to be done to start such business. No business can succeed without taking risks whether it be investment risk, financing risk or operational risk. One has to undertake such risks to take their business at new levels of heights. Now if we talk about investment risk, a lot of funds are required to be invested, sometimes at the cost of personal capital also.

Here’s how you get Govt.’s assistance for huge amount savings.

Subsidies constitute major part of government expenditures aims at providing assistance to budding entrepreneurs. Central Government is now encouraging such entrepreneurs by running various subsidy schemes all over India. These government oriented subsides are majorly beneficial for Manufacturing/Industrial units who have either (i) applied for sanctioning of a Term Loan against Machinery & allied equipments OR (ii) whose full/part disbursement is pending from Bank’s end in case already applied for such Term Loan (such subsidy percent varies from 15 per cent to 50 per cent totally depending upon the work to be carried out by such units).

Major Central Govt. Subsidy Schemes are illustrated as follows –

1.      Credit Linked Capital Subsidy Scheme (CLCSS)

This scheme is being run by Ministry of Small Scale Industries for Technology Upgradation of Small Scale Industries and amount being subsidized shall be up to maximum of 15% of cost of Plant & Machinery (subject to maximum ceiling of Rs. 15 lakhs).

2.      Capital Investment Subsidy Scheme

Being run by National Horticulture Board, this scheme covers Construction, Expansion/Modernization of Cold Storage for Horticulture produce wherein amount of subsidy is subject to 35% of ‘Capital Cost of Project’ in general areas and 50% in North-east region, Hilly & Scheduled areas.

3.      Development of commercial Horticulture

This scheme is run by National Horticulture Board for development of commercial horticulture through production & post-harvest Management of horticulture Crops where maximum amount of subsidy being 50% of ‘Original Cost of Project’.

4.      Subsidy scheme for only Integrated Post-Harvest Management Project

Being run by National Horticulture Board for development, maximum amount of subsidy is 35% of ‘Capital Cost of Project’ in general areas (subject to a maximum of Rs.50.75 lakhs) and 50% of ‘Capital Cost of Project’ in North-eeast region, Hilly & Scheduled areas (subject to a maximum of Rs.72.50 lakhs)

5.      Subsidy scheme for boosting Seed Production in Private Sector

Maximum amount of subsidy under this scheme (being run by National Seed Corporation which is under the administrative control of Ministtry of Agriculture & Farmers Welfare) is 40% in general areas and 50% in Hilly & Scheduled areas (subject to a maximum ‘Capital Cost of Project’ being Rs. 150 lakhs).

By providing initial financial assistance to small-scale industries, the Government of India has taken a big leap in encouraging many prospective entrepreneurs across the country to start their own business without worrying about the initial funding problems.

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Some recent updates that you would not like to miss –

1.    15.03.2017 (Wednesday) is the last day for Payment of Advance Income Tax by all assessees including 44AD cases (100%).

2.   Ministry of Finance has withdrawn Service Tax Exemption to Education Institutions other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. The new amendment will be applicable w.e.f. 1st day of April, 2017.

3.      The scope of definition of “Person” as per GST is proposed to include (i) Limited Liability Partenership, (ii) Any Corporation established by or under any Central, State or Provincial Act or a government company as defined in Sec 2(45) of Companies Act, 2013, (iii) Any body corporate incorporated by or under the laws of a country outside India (foreign company or body corporate), (iv) Trust and (v) Association of persons/body of individuals outside India.

4.      Now Income Tax Department will issue statutory legal notice to taxpayers who haven’t responded to cash deposit verifications after demonetization.

5.      GST council clears final draft of CGST & IGST law. UTGST & SGST bills shall be finalized at next meeting of Council on 16th March 2017.

6.      GST Council have decided to levy 5% rate on dhabas and small restaurants under GST.

Have a great day ahead!