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Frequently asked question

FAQ's for MSME Subsidy

  • Who is eligible for Capital+ Interest Subsidy?

    Any MSME manufacturing unit proposed to start new project or to expand its business is eligible for Capital + Interest Subsidy.

  • What is the amount of Capital + Interest Subsidy which State Govt Offeres?

    Based on Taluka Category, Capital and Interest Subsidy is given by State Government. Capital Subsidy from 10% to 25% with maximum limit from Rs. 10.00 Lacs to Rs. 35 Lacs and Interest Subsidy from 5% to 7% with upper limit from Rs. 25 Lacs to Rs. 35.00 lacs per annum is given by state Govt.

  • Is Term Loan mandatory for Subsidy?

    Capital and Interest Subsidy is Credit linked hence availment of Term Loan is mandatory for MSME subsidy from State government.

  • Whether expansion of existing unit is eligible for Capital and Interest Subsidy?

    Expansion of existing unit in Gujarat is eligible for subsidy provided new investment is increased by at least 50% of existing gross fixed capital investment of which minimum 60% investment has to made in Plant and Machineries. Further, expansion by way of first unit in Gujarat shall be eligible for subsidy as new unit.

  • Are second hand Plant and Machineries eligible for Capital + Interest Subsidy?

    Only Imported Second Hand Plant and Machineries is eligible for Capital + Interest Subsidy.

  • IS Reimbursement of Term Loan eligible for Capital + Interest Subsidy?

    It will be eligible if Term Loan is sanctioned within one year from production date.

  • Is service provider eligible for Capital Subsidy scheme?

    No, Service provider is not eligible for Capital Subsidy. They are eligible for Interest Subsidy only if established as new unit.

  • What is Udyam Registration?

    Udyam Registration is also called as MSME registration which required to established MSME status of unit. Any MSME unit must have udyam registration to avail the government benefit.

  • What’s the timeline for continuation of operation after filing application for subsidy?

    For MSME subsidy unit has to operate for 7 years and under CLCSS for 3 years.

  • Is there any rent subsidy for enterprise?

    Enterprise (MSEs) is eligible for 65% of rent and maximum Rs.1,00,000 pa.

  • Who is Eligible for Rent Subsidy?

    MSEs acquiring rented/leased shed for the purpose of manufacturing are eligible.

  • What is the time period of filing application for subsidy in Gujarat?

    Unit has to file application within the one year from the date of 1 disbursement of loan.

  • What is the power connection Charges subsidy scheme of Gujarat Govt?

    Assistance is @ 35% of charges paid to distribution license for LT/HT service line maximum limit up Rs.5 lakhs.

  • Is there any condition regarding location of unit for power connection charges subsidy?

    Unit applying for power connection charges subsidy must be located at place other than GIDC area and approved Industrial park.

  • Is there any subsidy provided by Union Territory of DD and DNH?

    -Capital subsidy is 10% max 25 lakhs, Interest subsidy is 5% max 30 lakhs - For Normal Textile Interest Subsidy @5% max. Rs. 50 Lakhs pa, and for Technical Textiles Interest Subsidy @6% max. Rs. 50 Lakhs pa for the period of 5 years.

  • How many times unit is eligible for capital and interest subsidy?

    As per the current Industrial Policy units are eligible twice for subsidy.

  • Why Taluka 1 category has higher rate of subsidy?

    Area under Taluka 1 category are under-developed, so, in order to attract industries in such areas govt. provide higher rate of subsidy.

  • Whether a unit can avail subsidy of both state and central government for the same project?


FAQ's on Electricity Duty exemption

  • Who is eligible for Electricity Duty Exemption?

    Any First manufacturing unit in Gujarat or expansion of existing unit in Gujarat shall be eligible for exemption from electricity duty for a period of 5 years.

  • Are second hand Plant and Machineries eligible for Electricity Duty Subsidy?

    It is eligible for duty exemption provided that Value of used machinery shall be up to 10% of total Investment. Further, second hand Imported machineries will be treated as new machineries.

  • Is expansion of existing unit eligible for Electricity Duty Exemption?

    It is eligible, provided new investment in Plant and Machineries is increased by 50% of existing gross value of Plant and Machineries.

FAQ's for CLCSS Subsidy

  • What is CLCSS Subsidy?

    It is subsidy offered by Central Government for acquisition of latest specified technology in the production line.

  • Who will be eligible for CLCSS subsidy?

    Any enterprise having Micro and Small Status (MSE) shall be eligible.

  • What is amount of Subsidy under CLCSS?

    Lower of 15% of basic value of P & M or 15% of Term Loan with maximum Rs. 15.00 Lacs is eligible for CLCSS subsidy.

  • Whether Term Loan is mandatory for availment of CLCSS subsidy?

    Yes, availment of Term Loan and CLCSS clause in Term Loan Sanction letter is mandatory condition for CLCSS subsidy of Central Government.

  • How many times CLCSS subsidy can be availed?

    Under one PAN no. CLCSS subsidy can be availed several times, but up to maximum Rs.15 Lacs.

FAQ's for Textile Subsidy

  • Which type of unit is eligible for Textile Subsidy?

    Any MSME or large unit is eligible for subsidy under Textile scheme of Government.

  • What is Government Incentive for Textile Unit?

    Textile Unit is eligible for Capital subsidy under Amended Technology Upgradation Fund Scheme (ATUFS) of Central Government and Interest and Power Tariff Subsidy under Textile scheme of Gujarat Government.

  • Whether expansion of existing unit is eligible for subsidy under Textile Scheme?

    Yes, provided it satisfy the condition as per policy guidelines.

  • Whether machine purchased before Term Loan sanction is eligible for ATUFs subsidy?

    No, machine purchased after date of sanction is eligible for Subsidy under ATUFS.

  • What is time Limit for subsidy under Textiles?

    Registration has to be made before production and application for sanction has to be made within 12 months from first disbursement date for subsidy under Textile policy of Gujarat Govt. Further, for ATUFs subsidy application for UID has to be made within 6 months from Term Loan sanction.

  • Whether any activity is excluded under Textile Policy?

    Yes, Ginning, Spinning, Woven Sacks, Garment & Apparel and Enterprise located in SEZ are Not Eligible Enterprise under Textile Policy.

  • Whether Textile unit can get the Capital + Interest Subsidy of MSME.

    No, Textile unit is eligible for subsidy under Textile Policy only and they are not eligible for subsidy under Capital + Interest Subsidy.

  • What is subsidy for textile unit available in India?

    -Interest Subsidy @4% to 6% by way of reimbursement with the maximum amount of Rs. 20.00 Crores per annum for a period of 5 years. -Power Tariff Subsidy of Rs. 2 to Rs. 3 per billed unit (Kwh) for a period of 5 years. -Under ATUF Capital subsidy @ 10% of eligible GFCI to units engaged in normal textile and @ 15% for Technical Textile manufacturer.

FAQ's for Bank Finance

  • Who is eligible for availing credit facilities?

    Private limited companies, Limited companies, Proprietorship firm, partnership firm engaged in manufacturing or trading activities can avail credit facilities in the name of enterprise and the limits are based on the turnover as well as profit of the entity. The entity should be profit making during the previous three financial years. Individuals can also avail credit facilities in the form of housing loan, loan against property, etc. provided he/she has filed ITR for last three years and the income should be appropriate.

  • How much duration does it take for sanction of Credit facilities?

    Generally the credit facilities would get sanction within 1-2 months provided all the terms and conditions of the bank gets fulfilled within such period of time.

  • What will be the rate of interest for the facilities to be availed?

    For medium, small and micro enterprise, the rate of interest will be around 8.00% to 8.50%. For large entity with green field project, the interest rates are around 8.00%. The rate of interest probably depends on the rating done by bank based on the financials of the entity.

  • How many months of moratorium is available in the term loans?

    It vary from clients to client’s requirement and the moratorium period can be available between 6 months to 1.5 year. It can also be extended subject to the requirement of proposal.

  • What is promoter’s margin?

    It is to be informed that the bank will finance 75% of the amount of total project cost and rest 25% needs to be contribute by promoter. In the case of construction of factory building, the bank will finance 70% of the total estimated cost and rest 30% will be promoter’s own margin.

  • What is the difference between primary security and collateral security?

    Primary security is the asset created out of credit facility extended to the borrower and which is directly associated with the business of the borrower for which the credit facility has been extended. Collateral security is any other security offered for the said credit facility.

  • Can one repay its loan before the scheduled period?

    Yes one can make pre-payment of its loan before its tenure period but in that case bank will charge pre-payment charges which you have to pay to the bank.

  • What is the maximum tenure for term loan provided by bank?

    Maximum tenure for Term Loan is up to 84-96 months.

  • What is the Difference between Bank Guarantee & Letter of Credit?

    Both BG and LC are the Non-Fund Based, Bank Guarantee is two types i.e. Financial Guarantee and Performance Guarantee, Financial Guarantee is been offered to various Govt Dept. like. Electricity, Gas Connection, etc. Whereas Performance Guarantee is been offered to tender-based work allotted to contractors, sub-contractors, etc. Letter of Credit is been offered to various suppliers for purchase raw materials and to acquire capital goods.

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