Subsidy for Quality Certification under Motivation of Entrepreneurs to Start Industries and Fiscal Assistance to Industries

What is the Subsidy for Quality Certification?

Subsidy for Quality Certification is a component of "Motivation of Entrepreneurs to Start Industries and Fiscal Assistance to Industries; Various Incentives", the incentive package of the Industries and Commerce Department, Union Territory of Puducherry. The package was framed under the New Industrial Policy 2016 and this set of incentives came into force with effect from 1 April 2017, in operation across the whole Union Territory.

Under this component the department grants assistance for a maximum of three quality certifications at 50 per cent of the cost of certification, with a ceiling of Rs 2,00,000 per unit.

The reasoning behind it is commercial. A small unit in Puducherry that wants to supply an automobile assembler, a pharmaceutical major or an export buyer is usually asked for a management system or product certification first, ISO-type quality management certification, food safety certification, product marks and so on. The audit and certification fee is a fixed cost that does not scale down for a small supplier, and it often decides whether a unit can enter a supply chain at all. Puducherry meets half of it.

What exactly does the subsidy cover?

The admissible cost is defined narrowly, and this is where most claims go wrong. According to the incentives order, the cost of the certificate includes the fees charged by the certification agency approved by the Quality Council of India (QCI), and excludes travel, hotel and surveillance charges.

Two further limits apply:

• The expenditure incurred for renewal of the certificate is not eligible for assistance. Only the original certification cost qualifies.
• A unit that has availed investment subsidy from the central government, the state government or any other agency for the same investment cannot claim again under this scheme.

Who is eligible for the quality certification subsidy?

Your unit can claim if:

• Your unit is a micro, small, medium or large industry in the Union Territory of Puducherry.
• The investment was made on or after 1 April 2017.
• The certification was obtained from a certification agency approved by the Quality Council of India.
• Your unit gives at least 60 per cent of its total employment to people of the Union Territory of Puducherry, and maintains that share for the period stated in the affidavit filed with the claim.
• You undertake not to transfer or dispose of the fixed assets, including plant and machinery, until five years from the date of submitting the application or the date of disbursement, whichever is later.

Additional investments made by a new or existing unit after the first claim are also eligible for subsidy, up to the ceiling limit.

You are not eligible, and cannot apply, if:

• You are claiming for the renewal of an existing certificate rather than a fresh certification. Renewal expenditure is expressly excluded.
• The certifying body is not approved by the Quality Council of India.
• You are trying to include travel, hotel or surveillance charges in the claim; those are outside the admissible cost even if the certification itself qualifies.
• The same expenditure has already been subsidised by a central or state agency.
• Your unit's local employment is below 60 per cent of total strength.
• You are an individual, a consultant, a trainee or a job seeker, rather than a registered industrial unit. This component has no personal benefit.
• The claim is filed after the one-year window described below.

Where two or more industrial undertakings are set up by the same proprietor, by common partners or by a common board of directors or shareholders, they are treated as separate entities for subsidy, provided their locations are different and their licences, clearances and registrations are separate.

What documents are required?

How to apply for the Subsidy for Quality Certification

1. Confirm the certifying body is QCI-approved before you commit to the certification. A certificate from a body outside the Quality Council of India's approval list will not support a claim, however genuine the audit.
2. Download the common application form for subsidies from industry.py.gov.in/common-application-subsidies, or collect it from the Directorate of Industries and Commerce, Industrial Estate, Thattanchavady, Puducherry 605009.
3. Separate the certification fee from other charges on the agency's invoice. Ask the agency for an invoice that shows the certification fee distinctly from travel, hotel and surveillance charges, so the admissible amount is obvious to the scrutinising officer.
4. Fill in all mandatory fields, attach self-attested copies of the certificate, the invoice and receipt, unit registration, the local-employment affidavit and the declaration on other subsidies, and sign the form.
5. Submit the application to the Directorate of Industries and Commerce, or to the regional office at Kottucherry in Karaikal, or the Civil Station offices in Yanam and Mahe.
6. Take an acknowledgement carrying the date and time of submission and a reference number for follow-up.

What happens after you apply?

The Directorate of Industries scrutinises the applications on merit to determine the quantum of subsidy admissible, and places the case before the State Level Committee. The Committee goes into the merits of each case, decides whether the unit qualifies for the incentive, and recommends the amount admissible. The subsidy is then released; through the financial institution where the unit is financed by a bank, PIPDIC or another government corporation, and directly to the entrepreneur where the unit is self-financed. Payment may come in one instalment or several, depending on the funds available with the department in that year.

By when must the claim be filed?

• New units, within one year of obtaining Entrepreneurs Memorandum Part-II, permanent registration, or the commencement of production certificate.
• Existing units: within one year of completing expansion, diversification or modernisation.

Common reasons quality certification claims are rejected

• Renewal fee claimed instead of an original certification cost.
• Certifying body not on the QCI approved list.
• Invoice bundles travel and surveillance charges with the certification fee, so the admissible amount cannot be isolated.
• More than three certifications claimed, or a cumulative claim above the Rs 2,00,000 ceiling.
• Local employment affidavit missing or the 60 per cent condition not met.
• Same expenditure already reimbursed under a central MSME certification scheme.
• Claim filed after the one-year window closed.

What else can a certified unit claim?

Quality certification usually comes as part of a wider upgrading effort, and the Puducherry package supports the rest of it too — technology acquisition assistance of 50 per cent up to Rs 10 lakh, intellectual property protection support of 50 per cent up to Rs 2 lakh for a domestic patent and Rs 5 lakh for an international patent, market development support of 50 per cent up to Rs 5 lakh for participation in an international trade fair as part of an industry association, and reimbursement of half the cost of an energy or water audit up to Rs 25,000. The skill enhancement component meets 50 per cent of training fees up to Rs 3,000 per person for a two-week upgradation programme run by the Puducherry Management and Productivity Council or another institute approved by the department.

Help and grievance redressal

• Directorate of Industries and Commerce, Industrial Estate, Thattanchavady, Puducherry 605009 to +91-413-2248476, 2248168, 2248320
• Karaikal: Assistant Director, Rural Industrial Estate, Kottucherry, +91-4368-265438
• Yanam; +91-884-2321257; Mahe, +91-490-233235
• Grievance redressal: industry.py.gov.in/grievance-redressal-mechanism

How to check your application status

This is an offline scheme, so there is no portal login where you can track your claim online. Status checks happen through the office that received your application.

1. Keep your acknowledgement ready. The reference number and date stamped on it when you submitted the common subsidy form is what the Directorate uses to locate your file, so quote it in every follow-up rather than only your unit's name.
2. Call or visit the office where you filed. Applicants who submitted at Puducherry head office should follow up with the Directorate of Industries and Commerce at Thattanchavady on +91-413-2248476, 2248168 or 2248320. Karaikal applicants follow up with the Assistant Director at the Rural Industrial Estate, Kottucherry (+91-4368-265438); Yanam and Mahe applicants use the respective Civil Station office numbers, +91-884-2321257 and +91-490-233235.
3. Ask specifically which stage the file is at: whether it is still under scrutiny at the Directorate, has been placed before the State Level Committee for a decision, has been recommended and is awaiting fund release, or has already been sent to the financing bank or PIPDIC for disbursement. The answer will differ depending on whether your unit is bank-financed, PIPDIC-financed or self-financed, since the release route changes with each.
4. For a self-financed unit, the payment comes directly to the entrepreneur, so a delay usually means the case is still awaiting committee recommendation or awaiting budget availability for that year; for a bank or PIPDIC-financed unit, also check with your financing institution, since the subsidy is routed through it and a hold there will not show up if you only ask the Directorate.
5. If there is no movement for several months after submission, or if you are asked to resubmit documents that were already filed, use the department's grievance redressal channel at industry.py.gov.in/grievance-redressal-mechanism rather than only repeating phone follow-ups, since a written grievance creates a dated record of your complaint.
6. Visit in person if a large gap remains unexplained. Carrying the original acknowledgement and a photocopy of the full application to the Directorate lets staff pull the physical file on the spot, which is often faster than a phone call once a case has been pending for an extended period.