Net SGST Reimbursement To Micro, Small And Medium Enterprises(MSMES)

In Gujarat, the state government announced Aatmanirbhar Gujrat Scheme in October 2022 for  Assistance to Industries. Under the said scheme, advantage of scheme for financial assistance by way  of Net SGST / Net VAT Reimbursement can be availed by MSMEs. The objective of the scheme is  greening the manufacturing process as well as contributing to the global supply chain by creating more  employment opportunities for balanced regional growth and inclusive development of the state. The  government aims to attract investments worth Rs 12.5 lakh crore to create jobs for some 15 lakh  youths. 

This scheme shall be applicable to a new industrial Undertaking, or an existing Industrial undertaking  that undertakes expansion, and which commences the commercial production during the operative  period of the scheme. It is up to the investor to decide the place of investment. Attractive incentives are given to encourage the investors to invest in weaker talukas. The upper limit of SGST is decided by  the eligible fixed capital investment made by the unit. 

MSME’s shall be eligible for reimbursement of net SGST based on the Taluka category of the project  subject to certain ceiling limits. 

For category 1, MSMEs can claim 100% reimbursement of net SGST paid up to 7.5% of Eligible  Fixed capital investment made by a unit. Wherein Category 1 includes 119 backward Talukas like Khergam of Navsari, Maliya of Morbi, Mandvi, Rapar, Lakhpat of Kuchchh, Kalyanpur and  Bhanvad of Devbhumi Dwarka, etc. 

For Category 2 Talukas, which include nearly 76 Talukas which are of developing nature like  Okhamandal of Devbhumi Dwarka, Viramgam of Ahemdabad, Rajula, Amreli, Deesa,  Bhabhar, Palanpur of Banaskantha and such others. For this category Talukas, MSMEs can  claim 90% reimbursement of net SGST Paid up to 6.5% of Eligible Fixed Capital Investment. 

Whereas, for Category 3, which includes 56 mature Talukas like Ahmedabad, Sanand, Anand,  Bharuch, Bhavnagar, Khambhaliya, Jamnagar and such others. For this category talukas,  MSMEs can claim 80% reimbursement of net SGST paid up to 5% of Eligible Fixed Capital  Investment made by the unit. 

The said period of 10 years shall be from the date of commencement of commercial production. Here,  Eligible Fixed Capital Investment shall include Investment in building, plant & machinery, utilities, tools  & equipment, technical know-how fees and other assets required for manufacturing of the end  product.