The following incentives target the establishment of Electronic Manufacturing Clusters / ESDM Parks and individual ESDM units setting up in the Electronics Manufacturing Zone (EMZ) within the state for period ending on 31st March, 2022 or approved Financial Incentives up to the limit of INR 20,000 Cr from competent authority (excluding FAB unit), whichever is earlier.
The Empowered Committee constituted under the policy shall decide upon the extension of policy period duration and increase in the amount of Financial Incentives mentioned above and shall also decide upon the disbursement of Financial Incentives in other EMZ.
Fiscal incentives applicable to ESDM units
4.1 Capital subsidy
• A Capital Subsidy of 15% on fixed capital other than land subject to maximum of INR 5 crore shall be provided
• The upper limit of Capital subsidy may be relaxed up to max. of INR 150 Cr. on case to case basis for investment more than INR 200 crore.
• This Subsidy shall be given only to the ESDM companies and admissible on the capital evaluated by Financial Institutions / Banks or by the committee constituted through the State Government or by the capital evaluated by the financial consultants as required.
4.2 Interest subsidy
An interest subsidy of 5% per annum for a period of 7 years on the rate of interest paid on the loans obtained from Scheduled Banks/Financial Institutions shall be reimbursed subject to a maximum of Rs. 1 crore per annum per unit.
4.3 Stamp Duty
• 100% exemption of stamp duty on purchase/lease of land for the establishment of individual ESDM units under EMZ
• For purchase/lease of land for the establishment of EMCs / ESDM parks, 100% exemption of stamp duty on first transaction (Authority to Developer/SPV) and 50% exemption of stamp duty on second transaction (Developer/SPV to ESDM Units)
4.4 Incentives for filing patents
To encourage research and development, Reimbursement of up to 100% of actual filing costs on awarded patents subject to a maximum of INR 500,000 for domestic and INR 10,00,000 for international patents.
4.5 State GST Reimbursement
100% State GST reimbursement subject to a maximum of 100% of fixed capital investment other than land (such as building, plant, machinery, testing equipment etc.) for a period of 10 years.
Other incentives applicable to EMC
4.6 Provision of Land
• 25% Land Rebate on prevailing sector rates shall be provided either to EMC SPV/ ESDM Parks and individual ESDM units, establishing inside EMZ on purchase of land from state Agencies. This rebate would be reimbursed from state budget.
• Floor Area Ratio (FAR)
Units will be allowed for 3.0 + 1.0 (Purchasable) floor area ratio
• Dormitories for Workers and welfare facilities
Up to 30% of total FAR in minimum 50 acre of land size as ‘’Industrial land use’’ and shall be allowed for welfare facilities like dormitories for workers, canteen, dispensary, etc.
4.7 Case to Case Basis
Only For ESDM unit with investment of more than INR 200 Crores:
Option 1
• ESDM unit with investment of more than INR 200 Crores and up to the limit of INR 300 Crores and create employment opportunities for minimum 1000 people shall be given special incentives as per the existing provisions of the policy, which shall be determined by the empowered committee. The maximum limit of the Financial incentives i.e. Capital subsidy and interest subsidy may be relaxed on the recommendation of the Empowered Committee and subject to approval from the state cabinet.
• ESDM units with investment of more than INR 300 Crores and create employment opportunities for minimum 1500 people shall be given special incentives, apart from the existing provisions of the policy, which shall be in the form of EPF, ESI Reimbursement, Electricity Duty Reimbursement, Training Cost Reimbursement, Rebate on Land, Power etc. and any other head to be determined by the Empowered Committee and subject to approval from the state cabinet.
Option 2
• ESDM unit with investment of more than INR 200 Crores and create employment opportunities for minimum 1000 people shall be given 80% Reimbursement on SGST subject to a maximum of 200% of fixed capital investment other than land (such as building, plant, machinery, testing equipment etc.) for a period of 10 years, whichever is earlier, which shall be decided by the Empowered Committee and the State Cabinet.
• Apart from the SGST Reimbursement as mentioned above, the ESDM Unit shall avail only stamp duty exemption, land provision, EMC Infrastructure development and nonfiscal incentives under this option.
Remarks
• ESDM units establishing inside the Electronics Manufacturing Zone (EMZ), shall be required to opt for one option only. Partial selection of provisions from both the options shall not be permissible.
• The Financial incentives to be allowed to any of the unit from all the resources unless stated otherwise in the policy shall not be more than 100% of the fixed capital investments to the units.
Fab Units:- ‘’Fab units’’ shall be provided a customized package on case to case basis which includes Land, Electricity, Water, Infrastructure, Capital sharing, Fiscal and Non-Fiscal Incentives etc.) subject to approval from Empowered Committee and the State Cabinet.
4.8 EMC Infrastructure Facilities
State Government shall provide a subsidy equivalent to 50% of the grant provided by the Central Government under National Policy on Electronics, 2012 in terms of the cost incurred in developing infrastructural facilities (Roads, Power, Water, Testing facilities, Social Infrastructure etc.) for EMC development.
Note: The above incentives shall also be applicable to the e-waste recycle companies which are going to be established in the EMCs.
4.9 Other Benefits
• Reimbursement of up to 5% of Fixed Capital Investment (other than land) for ESDM units on Training Cost incurred for High Skilled Technology Training e.g. Embedded System Design, VLSI Design, PCB Design and Manufacturing, Chip Manufacturing, TFT Manufacturing etc. subject to max. of INR 25 Cr. per unit, 50% of cost incurred on Training subject to max. of INR 2.5 Lac per employee for International Training and INR 1 Lac per employee for Domestic Training on completion of six months of employment for their UP Domicile workers, establishing inside EMZ.
This incentives shall be applicable for ESDM Units with investment more than INR 300 Cr. on case to case basis and shall not be more than 100% of Fixed Capital from all the resources unless stated otherwise in the policy
• Alignment with UP Skill development Mission with required skill sets for Electronics Industry in order to pass on the benefits of the scheme to the eligible.
• Alignment with skill development in ESDM sector with the budget allocated by DeitY for this scheme
• Permission will be provided to have 24X7 operations and employment of women in all three shifts.
4.10 Private ESDM Park
Domestic / Foreign Investor of ESDM sector willing to establish their unit in ESDM parks and are developed by the developers. These developers shall be given below incentives:-
• Allowed on Minimum 50 acre land
• 25% Land Rebate on the prevailing sector rates shall be provided on purchase of land from state agencies
• Developers shall get outside infrastructural development from Authorities
• Single Window Assistance from concerned authority and nomination of Nodal Officer for every parks
• Interest subsidy in the form of reimbursement of interest of up to 60% of annual interest for 7 years on the loan taken for building infrastructure (e.g. Road, Electricity, Water, Dormitories etc.) in the industrial parks subject to Rs. 10 crore per year with an overall ceiling of Rs. 50 crore per park.
• 100% exemption of Stamp Duty for purchase/lease of land on first transaction(i.e. Authority to Developer/SPV) and 50% on second transaction (i.e. Developer/SPV to ESDM Units)
4.11 Uninterrupted Power Supply
‘Protective Load’ for reliable power to EMCs /ESDM parks / Fab Units – A memorandum of understanding (MoU) shall be signed with UP Power Corporation Limited and EMC SPV / ESDM Parks / Fab Units for Uninterrupted Power supply which will ensure commitment of reliable & quality power.