Aatmanirbhar Gujarat Scheme for assistance to Large Industries and Thrust Sector: Net SGST Reimbursement

What is the Aatmanirbhar Gujarat Net SGST Reimbursement for large industries?

Aatmanirbhar Gujarat Scheme for Assistance to Large Industries and Thrust Sector is an industrial incentive package of the Industries and Mines Department, Government of Gujarat, notified through Government Resolution No. MIS-102022-1271(2)-I dated 5 October 2022. Net SGST Reimbursement is its largest single component, sitting alongside interest subsidy and EPF reimbursement.

The component returns to a manufacturer a defined share of the net State Goods and Services Tax it has actually paid in cash on its output, for 10 years from the date it starts commercial production. Because the reimbursement is capped as a percentage of the project's eligible fixed capital investment (eFCI) each year, the incentive scales with the size of the investment rather than with sales alone.

The scheme is available to large industrial undertakings with fixed capital investment in plant and machinery above Rs 50 crore. The operative period runs from 5 October 2022 to 4 October 2027. Gujarat's Industrial Policy 2022 sets out the two variables that decide the rate: the category of the taluka where the project is located, and whether the unit is in the general sector or a thrust sector.

How much net SGST is reimbursed?

According to the Gujarat Industrial Policy 2022:

The 10-year period runs from the date of commencement of commercial production (DoCP). Taluka categories are fixed by GR No. MIS-102020-347965-I dated 2 November 2020, which classifies every taluka in Gujarat for incentive purposes.

The guideline's worked example makes the mechanics concrete. A thrust-sector project in a Category 1 taluka with total FCI of Rs 2,000 crore, of which Rs 500 crore qualifies as eFCI up to DoCP, gets a provisional annual ceiling of 8% of Rs 500 crore, that is Rs 40 crore a year, until the eFCI is revised upward at the Final Eligibility Certificate stage.

Thrust sectors under the policy include green energy ecosystem, mobility, capital equipment, metals and minerals, textiles and apparel, sustainability, agro processing, gems and jewellery including lab-grown diamonds, and healthcare including pharmaceuticals, APIs and medical devices. A unit that does not qualify as thrust is considered under the general sector.

Who is eligible for the Net SGST reimbursement?

A unit can apply if:

• It is a large industrial undertaking with fixed capital investment in plant and machinery above Rs 50 crore.
• It is a new unit or an expansion set up within the operative period, with investment falling in the eligible investment period defined in the GR.
• It has obtained a Registration Certificate under the scheme, followed by a Provisional or Final Eligibility Certificate.
• It pays net SGST in cash in Gujarat on the eligible product.
• Where it also carries out trading from the same premises and separate GST registration is not permissible, it maintains separate CA-certified books of account for the manufacturing unit.

Who cannot apply:

• Individuals are not eligible. This is a corporate industrial incentive with no personal-benefit route.
• MSMEs below the Rs 50 crore threshold cannot apply here; they use the Aatmanirbhar Gujarat Scheme for Assistance to MSMEs. Mega units with Rs 2,500 crore of plant and machinery and 2,500 direct jobs apply under the separate Mega Industries scheme.
• A unit that has given a notarised affidavit of non-availment cannot draw the same benefit under another state government scheme.
• A unit expanding at premises other than its existing premises is not treated as an expansion unit; it must apply as a new unit with its own IEM/IL/LOP acknowledgement for that location.

What documents are required?

How to apply for Net SGST reimbursement

1. File the registration application in the prescribed format with the constitution documents, IEM Part A / IL / LOP, GPCB consent to establish, GST registration, land possession papers, non-agricultural permission, the notarised non-availment affidavit, bank sanction letter and the Detailed Project Report. Registration must be filed within one year of the date of first disbursement of the term loan, within one year of DoCP, or within one year of the GR date of 5 October 2022, whichever is later, and may also be filed before either date.
2. Apply for the Provisional Eligibility Certificate (PEC) to the Joint Commissioner of Industries, Large-INC Branch, Office of the Industries Commissioner, Udyog Bhavan, Gandhinagar, with investment acquired and paid up to DoCP, a Statutory Auditor certificate for fixed capital investment, Chartered Engineer certificates and the first sale bill. An officer or team appointed by the Industries Commissioner physically verifies the assets.
3. File the Net SGST claim online in the prescribed format from the date of commercial production, quarterly, half-yearly or annually. The first claim runs from DoCP to the immediate quarter end; later claims must match quarter start and end dates, and a "nil" claim must be filed for any period with nothing to claim.
4. Attach the GST record with every claim: GSTR-3B signed and stamped by the Commercial Tax Officer, and CA-certified credit ledger and cash ledger from the GST common portal.
5. Apply for the Final Eligibility Certificate (FEC) with investment up to project completion or up to the last date of the eligible investment period. Where the entire investment is complete at DoCP, a unit may skip the PEC and apply directly for the FEC within one year of DoCP, of the registration certificate, or of the GR date, whichever is later.
6. Submit GSTR-9 and GSTR-9C before the last four quarters of the incentive period are disbursed.

How claims are scrutinised and paid

The Office of the Industries Commissioner scrutinises each claim and disburses the eligible reimbursement. Three rules decide how much money actually arrives:

• 90% now, 10% later. 90% of the eligible net SGST reimbursement is disbursed at every claim under the PEC or FEC. The remaining 10% is held and released with the rescheduled reimbursements after the FEC is issued and the certified GST records are filed.
• Credit ledger balance is deducted. If a balance is found in the credit ledger while filing the claim, that amount is subtracted from the reimbursement.
• No carry forward. An unutilised annual ceiling lapses; the limit for a year must be consumed in that year.

Service timelines in the guideline, from the date a complete application is submitted:

Detailed asset verification is carried out when the FEC application is filed; after that, the authority visits only once a year during the eligible incentive period.

Why Net SGST claims get reduced or stopped

• Late PEC or FEC application. Only the delay is deducted, but it permanently shortens the incentive period, a six-month delay against 10 years leaves 9.5 years, and the reduction carries into the FEC.
• No FEC application within the time limit, which temporarily stops incentives drawn on the provisional certificate until the application is received.
• Credit ledger balance at the time of claim, deducted from the reimbursement.
• Turnover protection clause. Where the unit already manufactures the same product at another Gujarat unit of its own or a subsidiary, the combined turnover of the same product over five consecutive years must not fall below the average of the preceding three financial years. If it does, the net SGST incentive is reduced by the SGST on the shortfall.
• Expansion apportionment. For an expansion project, the claim is disbursed in the ratio of expansion investment to total investment, a Rs 600 lakh expansion against Rs 1,600 lakh total gives 37.5%, so Rs 2,000 lakh of SGST paid yields Rs 750 lakh eligible for computation.
• Missing certified GST records, especially GSTR-3B not stamped by the Commercial Tax Officer.
• No annual returns, which blocks the last four quarters of the incentive period.

Key dates

• 5 October 2022: GR No. MIS-102022-1271(2)-I issued; scheme becomes operative.
• 2 November 2020; GR No. MIS-102020-347965-I classifying talukas into Categories 1 to 3 for incentive purposes.
• 7 March 2024 — GR reconstituting the sanctioning authorities under the scheme.
• 4 October 2027; end of the operative period.
• 10 years from DoCP, duration of net SGST reimbursement for an eligible unit.

Help and contacts

• Office of the Industries Commissioner, Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar 382 010 to 079-23252683, 079-23252617, iccord@gujarat.gov.in
• Joint Commissioner of Industries, Large-INC Branch, Udyog Bhavan, Gandhinagar: registration, eligibility certificates and claims
• Scheme documents, guidelines and application forms, ic.gujarat.gov.in under Aatmanirbhar Gujarat Scheme

The guideline is issued only to make processing understandable; for legal interpretation the Government Resolution prevails.