Freight Subsidy Scheme (FSS) 2013

What was the Freight Subsidy Scheme 2013?

Freight Subsidy Scheme 2013, usually written as FSS 2013, was a central industrial incentive notified by the Department of Industrial Policy and Promotion, now the Department for Promotion of Industry and Internal Trade, and administered on the ground in Assam through the Industries and Commerce Department and the District Industries and Commerce Centres.

FSS 2013 addressed a specific structural problem. A manufacturing unit in Assam pays more to bring in raw material and more to send finished goods to market than a comparable unit near a port or a major consumption centre. That extra cost is not a result of inefficiency; it is a consequence of geography. FSS 2013 reimbursed part of that freight cost so that the locational handicap did not by itself decide whether a factory in Assam could compete.

The scheme replaced the Transport Subsidy Scheme, which had run since 1971 for industrial units in remote, hilly and inaccessible areas. According to the Department for Promotion of Industry and Internal Trade, the Transport Subsidy Scheme was modified and notified as the Freight Subsidy Scheme 2013 with effect from 22 January 2013 for a period of five years.

Is the Freight Subsidy Scheme still running?

No. FSS 2013 was discontinued with effect from 22 November 2016. This is the single most important fact on this page, and it is the one most often missed by entrepreneurs who find the scheme still listed on department websites.

The Government of India's stated reasons were the development of new road and rail linkages to the covered regions, and the recommendations of a study report submitted in July 2016 that examined whether the freight disadvantage the scheme offset still justified an open-ended reimbursement.

A crucial saving clause applies. Industrial units registered under the scheme prior to the date of the DIPP notification of 22 November 2016 remain eligible for the benefits of the scheme. In practice this means a unit that had already registered and commenced commercial production could continue to file freight claims for the eligible period, subject to budget availability and the state's claim settlement process. It does not mean a new unit can register today.

Which areas and units did FSS 2013 cover?

FSS 2013 operated in:

• All eight North Eastern states, including Assam
• Himachal Pradesh
• Uttarakhand
• Jammu and Kashmir
• Darjeeling district of West Bengal
• Andaman and Nicobar Islands
• Lakshadweep

Within Assam, the beneficiary was always an industrial unit, registered with the District Industries and Commerce Centre and in commercial production. The reimbursement covered freight on:

• Raw materials brought into the state or into the eligible area for use in manufacturing, and
• Finished goods moved out of the unit to the market.

Movement had to be genuine, documented and between the notified rail head or entry point and the unit's location. Freight on trading consignments, where no manufacturing took place, was not the object of the scheme.

Who could claim under FSS 2013, and who could not?

A unit could claim if:

• It was an industrial unit located in an eligible area of Assam.
• It was registered under the scheme before 22 November 2016.
• It had commenced commercial production and could produce the certificate of commencement from the District Industries and Commerce Centre.
• It could document the actual freight paid with transporter receipts, lorry receipts or railway receipts, matched to purchase and sale invoices.

A unit or person is not eligible and cannot apply if:

• It seeks to register now. Registration closed on 22 November 2016 and there is no reopening.
• It is an individual seeking a personal benefit. FSS 2013 was never a citizen entitlement; it reimbursed a business cost to a registered manufacturer. Individuals, households and self-employed persons without a registered industrial unit cannot apply.
• It is a pure trading or reselling business with no manufacturing activity.
• It cannot produce documentary proof of freight actually paid. Estimated or self-declared freight was not admissible.

How to apply for a residual claim under the Freight Subsidy Scheme

This route applies only to a unit already registered before 22 November 2016 and pursuing a residual claim. There is no citizen application.

1. Confirm your registration date. Retrieve the FSS registration certificate issued to the unit and verify that it predates 22 November 2016. Without this, nothing further is possible.
2. Assemble the freight documentation for the claim period, consignment notes, lorry receipts or railway receipts, matched against purchase invoices for raw materials and sale invoices for finished goods.
3. Get a chartered accountant's certified statement reconciling the freight claimed with the unit's books of account. Freight claims are ordinarily not entertained on self-certification alone.
4. File the claim with the District Industries and Commerce Centre of the district where the unit is located, in the prescribed format, and obtain a dated acknowledgement.
5. Follow the claim through the state-level committee, which scrutinises claims before recommending release. Be prepared for a physical inspection of the unit and of the stock and despatch registers.
6. Track the release, which is credited to the unit's own bank account. Given that the scheme is closed, releases depend on residual budget provision.

What documents does a residual FSS claim need?

Why FSS claims get rejected

• Registration after 22 November 2016, which is fatal to the claim.
• Freight documents that do not match invoices — a lorry receipt with no corresponding sale or purchase invoice cannot be verified.
• Trading consignments claimed as manufacturing freight.
• Claims filed beyond the period for which the unit was eligible.
• No CA certification of the claim statement.
• Unit found closed or not in production at inspection.

What should an Assam industrial unit look at instead?

Freight reimbursement in the FSS form is no longer available. An industrial unit setting up in Assam today should look at:

• The Industrial and Investment Policy of Assam, 2019 and its 2023 amendment, which carry State GST reimbursement, power subsidy, generating set subsidy, stamp duty reimbursement, interest subsidy on working capital loans and assistance for technology transfer and quality certification.
• The UNNATI scheme, 2024 of the Government of India for the North Eastern region, which carries a capital investment incentive, capital interest subvention and manufacturing and services linked incentives.
• The Margin Money Grant Scheme and other state schemes of the Industries and Commerce Department for smaller units.

Help and grievance redressal

• District Industries and Commerce Centre in the district where the unit is located, for residual claim status.
• Commissionerate of Industries and Commerce, Government of Assam at industriescom.assam.gov.in.
• Assam Single Window / Ease of Doing Business helpline: 1800 345 3579, email eodb-assam@assam.gov.in, for questions on which incentive currently applies to a proposed unit.

Because FSS 2013 is closed, treat any offer to "get you registered under the Freight Subsidy Scheme" as a red flag. Registration under this scheme has not been possible since 22 November 2016.