TN comes out with three-stage process to sanction incentives to projects in the range of Rs 50 crore to Rs 300 crore

C Shivakumar @ CHENNAI

Sanctioning of standard incentives to be provided to investors in projects that are greater than `50 crore and less than `300 crore will now be done in three stages under fresh guidelines issued by the industries department.

Overruling an earlier Government Order which mandates Sipcot as sanctioning authority, the fresh guidelines issued last week mandates Guidance as the scrutinising agency for the projects (`50 crore to `300 crore) while nominating Commissionerate of Investment Promotion and Facilitation, which was created in  February, as sanctioning authority. Sipcot has been made the disbursal agency.

Under the guidelines, application for availing incentives should be submitted to Guidance which, after carrying out due diligence, will forward it to the scrutinising agency within 14 days. Companies not meeting the eligibility criteria will be informed of their ineligibility. The Commissionerate of Investment Promotion and Facilitation will issue a letter of sanction of incentives to the company detailing eligible incentives within seven days of receipt of application from Guidance. The application will then be forwarded to Sipcot to disburse the incentives.

The company will have to provide a chartered accountant certificate and documentary evidence ascertaining the investment, employment, production and expenditure and the 'Letter of sanction of incentives' to Sipcot, which will carry out random inspection to verify whether the investment, employment and production capacity is fulfilled as per the chartered accountant certificate.  Following this, a deed of agreement will be signed within 14 days.

Under the guidelines, during standard investment period of four years, a company can apply only once for sanction of incentives. Expansion projects are eligible for sub-large packages (`50 crore to `300 crore) subject to fulfilment of 25% incremental capacity over the existing capacity. For projects with multiple product lines, increase on the base volume shall be calculated in value terms.