Scheme for Financial Assistance to Integrated Logistics Facilities: Exemption of Electricity Duty

What is the electricity duty exemption for integrated logistics facilities?

Exemption of Electricity Duty is one of nine incentives under the Scheme for Financial Assistance to Integrated Logistics Facilities, the incentive package notified by the Industries and Mines Department, Government of Gujarat, under the Gujarat Integrated Logistics and Logistics Park Policy, 2021. The exemption removes the state electricity duty payable on power consumed by a new logistics project for the first five years of its operation.

Electricity duty is a state levy charged on top of the energy tariff. For a temperature-controlled warehouse, a container freight station or a multimodal logistics park, power is a large and permanent cost, because refrigeration, material handling equipment, lighting and IT systems run continuously. Removing the duty for five years lowers the operating cost from the first year, which is different from a capital subsidy that only helps once.

According to the policy document, the incentive is "Exemption: 100% p.a. for 5 years" for a new unit or project, and the table records no cap against it. It sits alongside a 25% capital subsidy for logistics facilities capped at Rs 15 crore, a 7% interest subsidy for seven years capped at Rs 50 lakh a year, 100% one-time stamp duty reimbursement, 70% patent assistance up to Rs 25 lakh, 50% quality certification support up to Rs 10 lakh, skill development reimbursement of up to Rs 15,000 a trainee, and 50% technology assistance up to Rs 50 lakh.

The policy is implemented by the Logistics Policy Cell of the Industries and Mines Department, which evaluates proposals and puts them to the State Level supported Committee (SLEC) for sanction.

Who is eligible for the electricity duty exemption?

A project qualifies if:

• The applicant is a legal entity registered as a proprietorship, partnership firm, co-operative society, company, trust or non-governmental organisation.
• The project is a new unit or project. It commences operation during the operative period of the policy, holds a separate Letter of Intent or Letter of Approval from the competent authority, and has separately identifiable fixed capital investment housed in its own premises with separate books of account.
• Minimum fixed capital investment of Rs 1 crore has been made, for logistics facilities other than a logistics park or multimodal logistics park.
• The entity has a positive net worth.
• The project meets the local employment condition: at least 85% of total employment and 60% of managerial and supervisory staff must be domiciled in Gujarat.
• The layout conforms to environmental consent requirements and Town and Country Planning rules as applicable.

The policy clarifies that a new project does not lose eligibility merely because it uses the utilities of an existing project, such as water, electricity, steam or gas.

The following are not eligible or cannot apply:

• Individuals seeking a personal benefit cannot apply. This is a project incentive; there is no household or consumer version of it.
• State Government and Central Government departments are expressly excluded from all incentives under this policy.
• Existing units. Those that commenced commercial operations before the policy was announced; are not eligible for the electricity duty exemption, though they can access patent, quality certification, skill development and technology assistance.
• A unit that has already availed an incentive for the same assets under another scheme of the state government or any state agency is not entitled to incentives under this policy.
• Projects that do not meet the Rs 1 crore minimum investment, or that have a negative net worth.
• Projects that fail the minimum employment and minimum work performance conditions.

How much is the exemption worth?

The value depends entirely on connected load and consumption, since the policy sets no monetary cap. A cold chain warehouse drawing 1,000 kVA and consuming around 4 lakh units a month will pay a materially different duty from a dry warehouse of the same footprint. Because the benefit is an exemption applied by the electricity distribution company rather than a cheque from the department, there is no separate disbursement — the duty simply stops appearing on the bill once the exemption is recorded against the connection.

What documents are required?

How to apply for the electricity duty exemption

1. Register the project on the Investor Facilitation Portal at ifp.gujarat.gov.in. The policy provides for a separate logistics category on the portal, which acts as the single window for clearances and incentives.
2. Take 100% possession of the purchased land for the facility. The policy requires possession before the incentive application is filed.
3. File the incentive application on IFP with the Detailed Project Report and the approved layout plan, along with the entity documents, LoI/LoA and environmental consent.
4. Let the Logistics Policy Cell evaluate the proposal. The Cell reviews the details and places its recommendation before the State Level supported Committee.
5. Obtain the SLEC approval letter. The approved logistics facility must be completed within 3 years from the date of the approval letter, extendable by up to one more year on merit.
6. Submit the claim of assistance in the prescribed proforma to the Logistics Policy Cell, disclosing any incentive applied for under a Government of India or Government of Gujarat scheme.
7. Have the exemption recorded with the electricity distribution company, so that duty stops being levied on the connection for the five-year period.

How to track an application

Applications submitted through the Investor Facilitation Portal carry an application number and a status trail on the applicant's dashboard, from registration through DPR scrutiny, Logistics Policy Cell evaluation, SLEC agenda and sanction. Because the SLEC meets periodically rather than continuously, a file can sit at the "recommended" stage until the next meeting. Queries can be pursued with the Industries Commissionerate at 079-23252683 or by email at iccord@gujarat.gov.in, quoting the IFP application number.

Common reasons a claim fails

• The project is not new. An existing warehouse converted or rebranded does not become a new project without a separate LoI, separate premises and separate books of account.
• Land possession incomplete at the time of application, which the policy requires to be 100%.
• Minimum investment not met: below Rs 1 crore of fixed capital investment for facilities other than logistics parks.
• Local employment shortfall against the 85% and 60% thresholds.
• Same assets already incentivised under another state scheme.
• Project not completed within 3 years of the SLEC approval letter, with no extension sought.
• Ineligible expenditure claimed, such as goodwill, commissioning fees, royalty, preliminary and pre-operative expenses, capitalised interest, technical or consultant fees and working capital, all of which the policy lists as non-eligible.

Conditions that continue after sanction

Two obligations survive the sanction. First, the project must continue operations for at least 10 years from the date of receiving incentives; if it closes earlier for reasons within the management's control, everything released is recovered with interest within three months. Second, central government incentives may be taken, but the total from state and central sources cannot exceed the maximum limit under the relevant scheme.

Key dates and current status

• 2021; Gujarat Integrated Logistics and Logistics Park Policy notified by the Industries and Mines Department.
• The policy states it comes into force from the date of its notification and remains valid for five years, or until a new or revised policy is declared, whichever is earlier. Applicants at the tail end of that window should confirm the current position with the Logistics Policy Cell before incurring cost, since Gujarat announced a new industrial policy in 2026 and successor schemes can replace policy-linked incentives.
• SLEC approval date + 3 years. The deadline to complete an approved logistics facility, extendable by up to 1 year.

Where to raise a grievance

The Logistics Policy Cell, Industries and Mines Department, is the nodal agency for implementation, monitoring and grievances under this policy. Contact runs through the Industries Commissionerate, Block No. 1, Udyog Bhavan, Sector 11, Gandhinagar, on 079-23252683, or by email at iccord@gujarat.gov.in. The State Level supported Committee is authorised to interpret any provision of the policy, and its decision is final and binding on applicants.