Interest Subsidy Scheme for Smaller Business Units

What is the Interest Subsidy Scheme for Smaller Business Units?

Interest Subsidy Scheme for Smaller Business Units, 2018 is one of three special incentives that the Department of Information Technology, Electronics and Communications, Government of Goa, framed for the smallest firms in the state's IT sector. It was created under clause 6.2.11.c of the Goa Information Technology Policy–2018, ordered on 6 August 2018 and published in the Official Gazette, Series I No. 21, dated 23 August 2018 under notification number 2(11)/DOIT/2018/Spl. Incentives-SBU/748.

The notification's stated objective is "To provide Interest Subsidy to the eligible IT units in the State of Goa." The commercial problem it targets is specific: smaller software and IT-enabled services firms in Goa run on working capital loans to bridge the gap between paying salaries every month and being paid by clients sixty or ninety days later, and the interest on that facility is money that never becomes revenue.

The same notification carries two sibling schemes, the Market Support Scheme for Smaller Business Units and the Performance Linked Grant Scheme for Smaller Business Units, so a firm reading one should read all three.

Who is eligible for this interest subsidy?

A unit can claim if:

• The unit is a Smaller Business Unit as defined in the Goa IT Policy, and its operations are in Goa. Annexure 2 requires the applicant to declare this in writing.
• The applicant is a proprietorship firm, a private limited company or public limited company incorporated under the Companies Act 2013, a registered partnership firm under the Indian Partnership Act 1932, or a limited liability partnership under the LLP Act 2008.
• The bank accounts of the unit and of its partners or directors are linked to Aadhaar.
• The unit produces its Udyog Aadhaar, which clause 4.4 makes a pre-condition.
• The unit has an active working capital loan from a financial institution willing to sign the Annexure 3 certificate.

A unit is not eligible if:

• The unit is availing similar financial incentives under any other policy of the Government of Goa, which clause 4.6 forbids.
• The unit has already claimed under this scheme in three separate fiscal years, because clause 4.5 caps the incentive at once a year for a maximum of three years.
• The enterprise is a defaulter of the bank, since Annexure 3 asks the branch manager to certify default status and give the default period details.
• The claim includes penal interest, overdue charges or other charges — the bank certificate must confirm these are excluded.

Individuals, freelancers without a registered entity, and non-IT businesses cannot apply. This is a unit-level industrial incentive, not a personal loan subsidy.

How much does the scheme pay?

Clause 5 states the benefit in one sentence: for smaller business units, interest subsidy on the working capital loan will be provided, subject to a maximum of Rs 5 lakh per annum, for a period of three years.

Two things follow from that wording. First, the ceiling is annual, not lifetime, so a unit that claims the full Rs 5 lakh in each of three years receives up to Rs 15 lakh in total. Second, the subsidy attaches to working capital interest only. A term loan taken to buy servers or fit out an office is not eligible under this scheme, and a unit with a combined facility should ask its bank to break out the working capital interest separately in the Annexure 3 certificate.

The claim is annual by design. Clause 4.5 says the incentive "is allowed to be claimed once every fiscal year, up to a maximum of 3 years", which is a tighter rhythm than the quarterly option offered under the Internet Subsidy Scheme and the Lease Rental Subsidy Scheme.

How to apply for the Interest Subsidy Scheme for Smaller Business Units

1. Register the unit with the Department of Information Technology by filing Part 1 of the Common Application Form with the requisite documents, by email or on the web portal. The department generates a unique registration number.
2. Get the bank certificate. Ask your branch manager to complete Annexure 3 on bank letterhead with the seal. The sanctioned working capital loan amount, the rate of interest, the total disbursed and the date of the first instalment, the principal and interest repaid for the claim period, a confirmation that penal interest and other charges are not included, and a statement that the enterprise is not a defaulter.
3. File the claim by submitting Part 2 of the Common Application Form together with Annexure 1, the Interest Subsidy Form for Smaller Business Unit, and Annexure 2, the Declaration, to the Due Diligence Committee, by email or on the web portal.
4. Complete Annexure 1 with the auto-generated registration number, the period claimed under the policy, the total loan amount, the total interest paid and the eligible amount as per the policy.
5. Upload the supporting documents, the original loan agreement showing the terms, principal and interest rate, the receipts, bank statements or demand drafts proving the interest was paid, and Annexure 3.
6. Wait for the supported Committee decision. Clause 7.7 makes the committee the competent authority to accept or reject any claim, and its decision is final and binding on the applicant.

Applications are filed after the relevant expenditure has been incurred, so the interest must already have been paid before the claim is made.

When is the subsidy paid out?

The notification publishes a fixed clock from the day the incentive application is received, marked D:

Note that this scheme's day-30 step is worded as "scrutiny as per checklist and diligence", a slightly heavier step than in the sibling schemes, reflecting the bank verification involved.

Why claims under this scheme fail

• The Annexure 3 certificate is missing or incomplete. This is the single document only the bank can produce, and it carries five separate confirmations.
• Penal interest or overdue charges included in the claim, which the bank certificate is specifically designed to exclude.
• Default on the loan disclosed in the bank certificate.
• Term loan interest claimed instead of working capital interest.
• Udyog Aadhaar not produced, failing clause 4.4.
• Bank accounts not Aadhaar-linked for the unit, partners or directors.
• A fourth annual claim, or a second claim within the same fiscal year, both of which breach clause 4.5.
• Another Government of Goa incentive already taken on the same head, which triggers clause 4.6.
• No declaration of Smaller Business Unit status, which Annexure 2 requires explicitly.

How this differs from the state's other interest subsidies

Goa runs more than one interest subsidy, and applicants regularly confuse them.

The Interest Subsidy Scheme, 2017, notified by the Industries Department under notification 3/14/2017-IND, is for micro, small and medium manufacturing industries. It pays 30% of term loan interest, or on working capital the lesser of 1.5% of turnover and 30% of interest paid, with a ceiling of Rs 25 lakh a year and Rs 27.5 lakh for women and SC/ST applicants, and requires a minimum of 60% Goan manpower. Critically, clause 4.6 of that scheme says enterprises taking any benefit under a Department of Information Technology policy are not eligible for it. The two schemes are mutually exclusive by design.

The older Interest Subsidy Scheme, 2008, framed under the Goa Industrial Policy 2003, capped the benefit at Rs 5 lakh a year for micro and small enterprises and was notified to run only up to 31 March 2011.

An IT unit in Goa therefore claims under this DoIT scheme; a manufacturing unit claims under the Industries Department scheme; and neither can claim both.

What is the current status of the scheme?

Clause 1.2 says the scheme comes into force on publication in the Official Gazette and remains in force for five years from the date of notification, dating from 23 August 2018. The Department of IT's live Policies and Schemes page continues to list the Interest Subsidy Scheme for Smaller Business Units among the IT Policy 2018 schemes.

Clause 4.7 carries the standard warning that the provisions of the policy and its schemes are not binding representations or assurances, and that promissory estoppel will not apply against the government where a provision is not implemented. Confirm the operative notification and the current claim window with the department before budgeting around the subsidy.

Where to get help

• Startup and IT Promotion Cell helpline: 1800-233-5060
• Email: spc-dit.goa@gov.in
• Office: IT HUB, 2nd Floor, Altinho, Panaji, Goa 403001, Monday to Friday, 10:00 am to 5:30 pm
• Scheme text: the notification, Annexure 1, Annexure 2 and the Annexure 3 bank certificate format are printed in the Official Gazette Series I No. 21 dated 23 August 2018, published as ITPolicySchemes2018.pdf on goaonline.gov.in and startup.goa.gov.in

The scheme charges no application fee. The supported Committee decides every claim on the documents filed, so the quality of the bank certificate matters more than any follow-up.

How to check your application status

The scheme runs on a fixed 90-day clock from the day the Due Diligence Committee receives the claim (marked D in the notification), but there is no separate online tracking portal for this Goa DoIT incentive, so an applicant has to follow up directly.

1. Keep your reference numbers ready. Note the unique registration number generated when Part 1 of the Common Application Form was filed, and the date you submitted Part 2 along with Annexure 1, Annexure 2 and the bank's Annexure 3 certificate. Every follow-up call or email should quote both.
2. Check where you are against the published timeline. Applications move through scrutiny at D+30, committee approval at D+60, and a regret letter or sanction order with disbursement at D+90. If less than 30 days have passed since filing, the claim is most likely still in the scrutiny and diligence stage, since bank verification is a heavier step in this scheme than in its sibling incentives.
3. Call the Startup and IT Promotion Cell helpline at 1800-233-5060 during office hours (Monday to Friday, 10:00 am to 5:30 pm) and ask for the status against your registration number.
4. Email spc-dit.goa@gov.in with the registration number, the date of filing, and a request for the current stage of the claim if the helpline cannot give a definite answer or you need it in writing.
5. Visit the office in person at IT HUB, 2nd Floor, Altinho, Panaji, Goa 403001, if the claim has crossed 90 days without a sanction order or a regret letter, since Clause 7.7 makes the Committee's decision final and a delayed response usually means a document gap rather than a rejection.
6. Watch for a regret letter versus a sanction order. A regret letter means the Committee has rejected the claim and will typically point to the missing condition (most often an incomplete Annexure 3 or a disqualifying clause); a sanction order means the subsidy has been approved and disbursement should follow without further action from the applicant.

Because the Committee's decision is communicated in writing, there is no informal or verbal approval to rely on. Treat the regret letter or sanction order as the only authoritative word on where a claim stands.