It subsidy in gujarat

IT/ITeS Policy (2022-27) of Govt. of Gujarat

New IT/ITeS Entitiescommencing commercial operations from 7th Feb’2022 onwards in Gujarat with minimum of 50 employees on its payroll (also included, Existing units operating outside Gujarat but commencing commercial operations in Gujarat from 7th Feb’2022 onwards)

IT/ITeS units already operating in Gujarat (with minimum 50 employees on its payroll) and increases headcount on its payroll by 50% of past 1 year average number of employees. (As per Policy, 50% growth to be achieved during the operative period of the Policy but clarification like previous policy is expected where 50% increase shall be required in 1 or 2yrs period depending upon the amount of Investment)

Incentives and Offerings for the Eligible Units (with Investment up to INR 250 Cr.):

One-time CAPEX support of up to 20% for construction of building and 30% of other Fixed Assets and GFCI components of the eligible CAPEX expenditure, subject to a max ceiling of INR 50 Cr. (in twenty (20) equal quarterly installments). Eligible Capex Expenditure includes (within 2years of commencement of commercial operations):

• Construction of the building (capped at INR3,000/sq. ft. of built-up area, applicable for a total built-up area computed at 60 sq. ft. of built-up area per employee)
• Computers, software, networking related hardware and
• Other related fixed assets (expected to include major asset heads of IT/ITeS units like Furniture, Electrification, ACs and other Office Equipments but clarification is awaited)
• Stamp Duty & Registration Fees paid for lease/sale/transfer of land and office space.
• Expenditure towards purchase of equipment for setting up of captive Renewable Energy Plant.

OPEX support of up to 15% of the annual eligible OPEX expenditure (max ceiling of INR 40 Cr. per year for a period of 5 (five) years from the date of eligibility. The disbursement will be done in quarterly installments. 'Eligible OPEX expenditure' includes the following:

1. Lease rental paid to a third party (cap of Rs.50/sqft of built-up area)
2. Bandwidth expenditure (from a service provider with valid GST Number)
3. Cloud rental expenditure (from a service provider with valid GST Number)
4. Power tariff expenditure (excluding Electricity Duty which is refunded separately)
5. Patent expenditure (up to INR 5Lacs per patent, max 10 patents/year for 5 years)

(Expansion Units are expected to get OPEX Support only on the Incremental OPEX Expenditure like previous policy but new policy is silent on the same and clarification is awaited)

One-time support for every new and unique job created in the State. It is applicable for new local employees hired and retained for a minimum period of one year at 50% of one month's CTC up to INR 50,000 per male and INR 60,000 per female employee.

Note: The EGI assistance is tied to each individual IT employee and can only be claimed once for each individual IT employee in their lifetime. Therefore, if an IT/ITeS unit claims this incentive for any individual IT/ITeS employee, and thereafter the same individual IT/ITeS employee moves to another IT/ITeS unit, the subsequent IT/ITeS unit cannot claim the EGI assistance for the same. The applicable rules to implement the EGI assistance shall be formulated and released separately. (This support is expected to be provided not only for Freshers but even Lateral/Experienced Hiring, one-time for each employee and is expected to be tracked via Aadhar Number of the Employees with Gujarat address but detailed clarification is awaited)

Interest subsidy at 7% p.a. on the Term loan for 5 years from the start of actual interest repayment, with a ceiling of INR 1 Cr. per annum. Presently, policy includes Term loan only for the Expenditure towards construction of the building, Computers, software, networking related hardware and other related fixed assets. (Clarification is awaited to include Purchase of Office Premises as well under this head like it was allowed in the previous policy)

Atmanirbhar Gujarat Rojgar Sahay (AGRS)

Reimbursement of Employer’s Contribution to EPF for 5 years for all new hires in case of New Units and Incremental Employees in case of Expansion Units with criteria of 100% for Females and 75% for Males with ceiling of 12% on Basic + applicable DA+ retaining allowance.

Reimbursement of the entire amount of electricity duty paid by the eligible units to the Government of Gujarat for a period of five years. (Presently, it comes around INR 2 per unit of consumption)

Apart from these incentives, there are provisions for even better incentives for Mega Projects with Investments > INR 250 Cr. or Employment Generation of 2000 Direct IT/ITeS Employees.

Upskilling industry-ready talent: The Government will incentivize the beneficiaries (students and working professionals of Gujarat) for successfully completing globally recognized courses in Information & Communication Technology (ICT) through Direct Benefit Transfer (DBT) up to a maximum of IN R 50,000 per course or up to 50 per cent of the course fee, whichever is lower. (Separate operational guidelines will be issued for the same)

Facilitating Infrastructure (Co-working Spaces)

The eligible IT/ITeS units opting to start their operations in co-working IT office spaces under the Government facilitated/empanelment model shall be eligible for the following fiscal support for a period of five years from the date of start of commercial operations or in-principle approval, whichever is later:

• 50% of per seat monthly rental for First 2yrs with Incentive ceiling of INR 10,000 per seat per month
• 25% of per seat monthly rental for 3 to 5yrs with Incentive ceiling of INR 5,000 per seat per month

Note: Any IT/ITeS unit availing benefit under this section will also be eligible for assistance under the EGI and Atmanirbhar Gujarat Rojgar Sahay (AGRS). However, such IT/ITeS units will not be eligible for any other fiscal incentives (CAPEX/OPEX Support, Interest Assistance or Electricity Duty Incentives) defined in this Policy.

Please get in touch with us for detailed planning on how to avail maximum benefits out of this new Policy.