NEW CENTRE SECTOR SCHEME FOR

INDUSTRIAL DEVELOPMENT OF
JAMMU & KASHMIR
ECONOMIC COMPOSITION OF
J&K (UT)
Share %

Agriculture

Industry

Tourism

Service

0 10 20 30 40 50 60
Commencement & Duration of the Scheme:-
It will be effective form 01.04.2021 and will remain force up to and inclusive of 31.03.2037

Application period for registration:-

Registration shall commence form 01.04. 2021 and will continue till 30.09.2024, subject to the
guidelines issued in this regard.
All applications for registration shall be disposed of by 31.03.2025 unless otherwise extended, all
applications shall be made online

Website link : www.investjk.in

GENERAL GUIDELINES
ELIGIBILITY FOR INCENTIVE
 Commence commercial production / operations within 3 years from the date of grant of
registration.
 Any Eligible Investment made on after 01.04.2019 will be taken into consideration to decide
the eligible value of investment, however date of commencement of commercial
production/operation must be on or after 01.04.2021.
 Units availing benefits under other schemes of the Government of India will not be eligible for
similar incentives under the scheme.
 Service Sector [As mentioned in Positive List of Annex-II] units with a minimum
investment of Rs. 1 crore in building and other durable physical assets will be eligible for
the incentives under this scheme.
 Exclusion for Investment purpose: Cost of Land, Consumables, disposables or any other items
charged to revenue.
 Definitions:

- Commencement of Commercial Production: means starting of manufacturing finished goods on

commercial basis.
- Commencement of Commercial Operations: means starting of operation/delivering of services
on commercial basis.
Existing Units: means a unit which has commenced commercial production/operation prior to
01.04.2021 and is registered under GST in the UT of Jammu & Kashmir.
New Unit:-

(a) Means a unit registered under this scheme on or after 01.04.2021 but not later than
31.03.2025, Such unit must commence commercial production or operation within 3 years from the
date of grant of registration.
(b) A new unit will be required to fulfill the following conditions:
(i) It has not formed splitting up, or reconstruction of a business already in existence.
(ii) It is not formed by transfer to the new unit of the plant or machinery previously used for any
other purpose.
(iii) It has not relocated from elsewhere and/or is not an existing unit reopened under a new name
and style.
Provided that heritage property not in use before 01.04.2021 is restored thereafter for commercial or
hospitality or tourism services basis will also be considered as new unit as per eligibility conditions
to be further elaborated in detail guidelines.
Plant & Machinery: In case of Manufacturing units shall cover industrial plant and machinery as
erected at site which are newly purchased from open market at an arm’s length price. It excludes
relocated/recycled/refurbished plant & machinery.
 ANNEXURE I (NEGATIVE LIST)
FOLLOWING INDUSTRIES WILL NOT BE ELIGIBLE
FOR THE BENEFITS:
 Tobacco and manufactured tobacco substitute and Pan Masala.
 Plastic carry bags of less than 20 micron.
 Goods falling under Chapter 27 produced by Petroleum or Gas refineries.
 Plantation, Refineries and Power generating Units above 10 MW.
 Coke (Including Calcined Petroleum Coke), Fly Ash.
 Gold and Gold Ore
 Molasses
 Units not complying with environment standard or having applicable Environmental Clearance.
 Low valuation addition activities in goods such as preservation during storage, cleaning
operations, packing, replacing or re-labelling, sorting, alteration of retail sale price etc. [excluding
high value packaging and processing).
 Marbles, Travertine and Granite.
 Revolvers and Pistols
 Other as and when notified.
 FOLLOWING INCENTIVES ARE
PROVIDED UNDER THIS SCHEME

 Capital Investment Incentive (CII).

 Capital Interest Subvention (CIS) for Term Loan. For New & Existing Units

 Goods & Services Tax Linked Incentive (GSTLI).

 Working Capital Interest Subvention (WCIS) for Working Cap. For Existing Only
(I) CAPITAL INVSETMENT
INCENTIVE (CII)
 Eligible Investment:
For manufacturing sector : Installs new plant & machinery.
For Service : Constructs New building (Except value of Land) and other durable physical
assets. [Minimum investment for service sector is Rs. 1 Crore)
Eligible Units: {New + Existing units for substantial Extension}

New Units with Investment in P&M / Building and other durables physical assets, of not
more than 50 Crores.
Existing Units undertaking substantial extension in P&M / Building and other durables
physical assets, of not more than 50 Crores
 Quantum of Benefits (Zone Wise):

If Eligible Units located in

Zone A – Capital Investment Incentive @ 30% of the Eligible Investment made with maximum
limit of Rs. 5 Crore.
Zone B - Capital Investment Incentive @ 50% of the Eligible Investment made maximum limit of
Rs. 7.50 Crore.

Other Points:
Existing unit can avail this benefit for substantial expansion only once during the validity of the
scheme.
New Unit registered under the scheme will not be eligible to avail the benefits under substantial
scheme.
Physical Verification by prescribed authority of the units is mandatory before availing this
incentive subject to any special circumstances on recommendations by the UT.
(II) CAPITAL INTEREST
SUBVENTION (CIS) – TERM LOAN
 Eligible Term Loan:
Loan Availed for the purpose of Eligible Investment as per Capital Incentive.
Interest on Loan up to the principal amount of Rs. 500 Crores taken for Eligible Investment
shall be eligible for CIS.

Eligible Units : (New + Existing units for Substantial expansion}

Units who have made Eligible Investment as per CII Scheme.
 Quantum of Benefits:

- Capital Interest Subvention at the annual rate interest of 6% for a maximum of 7 consecutive
years. [from any date after the date of application for registration under this scheme but subject to
where disbursement made only after commencement of commercial production]
- The above subvention of 6% is given to the basis of Current Interest Rate of 8% which means if in
future Rate of Interest goes below 8%, let suppose 7% than eligible unit will have subvention up to
5% and must balance 2%. So, in any case the Eligible Unit will pay minimum al least 2%
 Other Points :

- Loans availed from Scheduled Commercial Banks or Financial Institutions registered by Reserve
Bank of India.
- Scheme Eligible on amount disbursed and not on the principal amount sanctioned for the term
loan.
Scheme available only for the New plant And Machinery or new Building and other durable
assets.
Service Sector Units with an investment of not less than Rs. 1 Crore in New building and other
new durable physical assets will be eligible for this incentive.
(III) GOODS & SERVICES TAX
LINKED INCENTIVE (GSTLI)
 Eligible Unit : {only for new units)
This schemes is for all New Unites registered under the CII or CIS scheme & made eligible
investment (irrespective of the value of the investment) and having a GST registration.
A unit will be required to have separate NEW GST Registration number for availing this
scheme, whether it is a new unit or existing unit.
 Quantum of Benefits:
Eligible Incentive = 100% of Gross payment of GST [through cash and input tax credit].
Maximum up to 300% of Eligible Value of Investment.
The Amount of Incentive paid in a financial year will not exceed one-tenth of the total
amount of Eligible Incentive under this component subject to full payment of GST as per
GST return filed for the claim period.
 Other Points:
In case gross GST paid by any unit in a financial year is more than one-tenth of the total amount
of eligible incentive, the balance can be carried forward to the subsequent financial year(s).
Further, in case the unit is not able to claim full eligible amount of incentives in the first 3 years,
the same can be carried forward to subsequent years but not beyond the period of 10 years or
beyond the validity of scheme, whichever is earlier.
GST paid on exported goods or services will not be counted towards eligible incentive amount
under this component.
(IV) WORKING CAPITAL INTEREST
SUBVENTION (WCIS). (ONLY FOR
EXISTING UNITS)
 Eligible Units
All existing units in the UT of Jammu & Kashmir taking Working Capital Loans & are
registered under GST prior to the date of notification of this scheme will be eligible for this
incentive, subject to the registration and other conditions as detailed in the guidelines.
Units located in both zones are eligible for this scheme.
 Quantum of Benefits:
Interest Subvention @5% on working capital loan for a maximum of 5 consecutive years
from the date of grant of registration under this scheme.
 Maximum benefit = 1 Crore in 5 years.
If the annual Rate of Interest charges by a bank falls below 6%, a minimum amount @1% per
annum of interest will still have to be paid by the eligible unit.
Since benefits are available to existing units so they will remain eligible even when they are taking
Working Capital Loans for Substantial Expansion.
MISCELLANEOUS POINTS
 Nodal Agency
The Jammu & Kashmir Development Financial Corporation Ltd. (JKDFC) or any other
agency authorized in this regard by the Government of India will be the nodal agency for
disbursal of Incentives under various components of the scheme.
Governance and Implementation Mechanism:
 The scheme will be implemented under the supervision of Govt. of India i.e. the Department
for Promotion of Industry & Internal Trade (DPIIT).
However, the registration process as well as processing of claims under different incentive
components is delegated to UT of Jammu & Kashmir.
 The registration process under this scheme will be paused in case the projected financial lability
of the authority will reach 115% of Approved funds for this scheme, subject to further
resumption of the registration process as and when will be available to the Authority. So, it is
advisable to all eligible units registered under this scheme as soon as possible. (i.e. if Liability
>=115% of 28400 Cr).
 60% of the cost of Pollution Control Devices subject to a New Units to get 100% exemption of
stamp duty on land transactions in Govt. Industrial Estate, Including lease deed and mortgage deed.
 50% subsidy on the expenditure incurred (rainwater harvesting, recycling, zero discharge
process).
 100% Subsidy on Purchase and Installation of DG Set capacity 10 KW to 2000 KW subject to
maximum of Rs. 45.00 Lacs per unit