Aatmanirbhar Gujarat Scheme for Assistance to Large Industries and Thrust Sector: EPF Reimbursement

What is the Aatmanirbhar Gujarat Scheme EPF reimbursement?

Aatmanirbhar Gujarat Scheme for Assistance to Large Industries and Thrust Sector is an incentive scheme of the Industries and Mines Department, Government of Gujarat, notified through Government Resolution No. MIS-102022-1271(2)-I dated 5 October 2022. Its operative period, as stated in the resolution, runs five years from 5 October 2022 to 4 October 2027.

The resolution bundles three incentives, numbered as schemes inside it. Scheme 1 is an interest subsidy, Scheme 2 is net SGST reimbursement, and Scheme 3 is EPF reimbursement. The component this guide covers. Under Scheme 3 an eligible large industrial undertaking claims back the employer's contribution to the Employees' Provident Fund paid for its new employees working in Gujarat, for a maximum of 10 years from the date of commencement of commercial production.

The purpose is straightforward: cut the cost of formal hiring so that large manufacturing projects create payroll jobs on the books rather than informal ones. Because the incentive is paid only for employees registered under EPF with a fresh UAN, it rewards genuinely new formal employment rather than transfers of existing staff.

How much does the EPF reimbursement pay?

The Government Resolution sets two conditions that apply together:

• 100% of the employer's statutory contribution under EPF, actually paid, and
• a per-employee ceiling of 12% of basic salary plus applicable Dearness Allowance and retaining allowance, or Rs 1,800 per month, whichever is lower.

In practice the Rs 1,800 figure binds for most employees, because 12% of a Rs 15,000 statutory wage ceiling is Rs 1,800. For a unit that hires 500 new EPF-registered employees, the ceiling works out to about Rs 9 lakh a month, or roughly Rs 1.08 crore a year, sustained for up to 10 years.

For an expansion or diversification project, assistance is available only for the incremental employee count beyond the headcount that existed before the expansion or diversification began.

Reimbursement is made quarterly by the Industries Commissioner on the basis of payment receipts submitted by the employer.

Who is eligible, and who is not eligible?

Who can claim

• A new large industrial undertaking. A legal entity such as a company, partnership firm including LLP, society, trust, industrial cooperative society or proprietary concern engaged in manufacture, production, processing or job work, with fixed capital investment in plant and machinery above Rs 50 crore, holding an Industrial Entrepreneur Memorandum or equivalent permission and DPIIT acknowledgement or registration.
• An existing industrial undertaking carrying out expansion or diversification that commences commercial production during the operative period. Expansion requires at least a 50% increase in gross fixed capital investment with at least 60% of it in plant and machinery, at least a 50% increase in installed capacity, and prior capacity utilisation of at least 75% in one of the three preceding financial years.
• Undertakings in the nine notified thrust sectors, which get better rates on the other two components: green energy ecosystem, mobility, capital equipment, metals and minerals, textile and apparel, sustainability, agro processing, gems and jewellery, and healthcare manufacturing. Pharmaceutical units must have a captive effluent treatment plant or access to a CETP.

Who cannot apply or is not eligible

• Individual employees. No worker applies and no worker receives money under this scheme; the reimbursement is to the employer against the employer's own contribution.
• Micro, small and medium undertakings — up to Rs 50 crore in plant and machinery, which are covered by the separate Aatmanirbhar Gujarat Scheme for Assistance to MSMEs, not this one.
• Undertakings located within the municipal corporation limits of Ahmedabad, Bhavnagar, Gandhinagar, Jamnagar, Junagadh, Rajkot, Surat and Vadodara.
• An undertaking that has availed EPF reimbursement under any other central or state scheme or agency for the same period.
• An undertaking that has already availed an incentive for the same gross fixed capital investment under another state government scheme, unless specifically provided.
• Units that commenced commercial production before 5 October 2022, which remain under the previous scheme (GR MIS-102020-327024-I dated 1 September

2020. or the MSME scheme, as applicable.

Note also that incentives under the resolution are capped at an eligible fixed capital investment of Rs 2,500 crore, whatever the actual investment, and that cap applies across a new unit and any expansion by the same undertaking.

What are the other incentives in the same resolution?

In every case the undertaking must itself bear at least 2% of the interest charged on the term loan, even after any central interest subsidy is offset. Electricity duty exemption is available as applicable under the Gujarat Electricity Act, 2003.

How to apply for the Aatmanirbhar Gujarat EPF reimbursement

1. File the registration application with the Industries Commissioner in the prescribed format, within one year of the first disbursement of the term loan, or one year of commencement of commercial production, or one year from the date of the GR; whichever is later. In every case the application must be made before the last date of the operative period. Attach the registration document and IEM, land possession papers with non-agricultural permission, GPCB Consent to Establish where applicable, the Detailed Project Report and the term loan sanction letter.
2. Obtain the registration certificate from the Industries Commissioner after scrutiny and verification, and commence commercial production during the operative period. Projects up to Rs 1,000 crore are registered by the Industries Commissioner; above Rs 1,000 crore, by the ACS or Principal Secretary, Industries and Mines Department.
3. Apply for the Provisional Eligibility Certificate within one year of the date of commercial production, the date of the registration certificate or the date of the GR, whichever is later. If the whole investment is already complete, apply directly for the Final Eligibility Certificate.
4. Apply for the Final Eligibility Certificate within one year of the last date of the eligible investment period if the investment was not finished earlier. Late applications lose the delayed period from the eligible incentive period.
5. Submit quarterly claims to the Industries Commissioner in the prescribed proforma, enclosing EPF payment receipts and UAN details for the new employees.
6. Cooperate with asset verification. For the Final Eligibility Certificate, the Industries Commissioner constitutes an Asset Verification team, and its report goes to the sanctioning authority.

Sanctioning is done by a committee chaired by the Industries Commissioner for investment up to Rs 500 crore, and by a committee chaired by the ACS or Principal Secretary, Industries and Mines Department, above Rs 500 crore.

What is the eligible investment period?

Investment counts from the date of the GR up to an extended period after the date of commencement of commercial production: 18 months where gross capital investment is up to Rs 1,000 crore, and 24 months where it is above Rs 1,000 crore. Undertakings switching over from the previous 2020 scheme may also count investment made during the previous scheme's operative period up to 5 October 2022.

Why claims get rejected or reduced

• Employee already had a UAN before joining, so is not a "new employee".
• EPF reimbursement already claimed from a central or state scheme for the same period.
• Location inside an excluded municipal corporation limit.
• Late application for the eligibility certificate, which cuts the delayed period out of the incentive period.
• Expansion claims counting the pre-expansion headcount instead of only the incremental employees.
• Missing EPF challans, since reimbursement is strictly receipt-based.
• Plant and machinery investment at or below Rs 50 crore, which puts the unit under the MSME scheme instead.

Where to get help

Registration, eligibility certificates and quarterly claims are handled by the Industries Commissionerate, Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar 382 010, telephone 23252683 / 23252617, email iccord@gujarat.gov.in. The scheme resolution and its official guideline document are published at ic.gujarat.gov.in on the Aatmanirbhar Gujarat Scheme page.

Disputes on interpretation go to a committee chaired by the Chief Minister under the resolution, and in special cases the Chief Minister's Cabinet Committee for Industrial Promotion and Monitoring can sanction a customised package. There is no fee for registration or for filing claims.