2.Commencement and Duration

2.1               Unless specifically mentioned against the respective items of incentives sanctioned under the 2004 Scheme, it shall come into effect on and from the Ist day of November, 2004 in the whole of Himachal Pradesh and shall remain valid for a period of five years ending on the 31^st of October, 2009.

3.Operation of the 2001 Scheme:-  

3.1               The 2004 Scheme will be operated by DEPARTMENT OF INDUSTRIES of the Government of HIMACHAL PRADESH for the rehabilitation or revival of industrial units in the State.

4          Definitions

4.1               In the 2004 Scheme, unless the context otherwise requires:-

(i)                         " State Government " means the Government of Himachal Pradesh and "Central Government" means the Government of India".

(ii)                       "DOI" means Himachal Pradesh Department of Industries.

(iii)                      "Unit" means any "small scale unit" or "medium and large scale unit" registered with Department of Industries set up in the State that is either "closed". "Sick" or "Weak".

(iv)                      " Medium & Large Scale Unit" means an industrial unit other than SSI unit and as may be defined as Medium and Large Scale Unit by the Government of India from time to time;

(v)                        "Small Scale Unit" means an industrial unit as defined by the Government of India from time to time.

(vi)                      "Closed Unit" means an industrial unit that has come into production at least 5 years ago and has remained closed for more than one year

(vii)                     "Sick Unit" means industrial Unit that and that has at the end of any Financial year, accumulated losses equal to or exceeding its net worth

(viii)                   "Net Worth" is the sum total of the paid up capital of the unit and its free reserves;

(ix)                      "Weak Unit" means an Unit that is not less than five years old that has incurred cash losses in the last two years;

(x)                       "Accepted Rehabilitation Proposal" means a viable proposal for utilizing the industrial assets of a Closed Unit, having the support of the Financial Institutions and/ or Banks having interest, that has been accepted by the State Government on the recommendation of the State Level Industrial Revival Forum.

(xi)                     "Accepted Revival Proposal" means a viable proposal for revival of a "Sick, or "Weak" Unit, supported by the Financial Institutions and/or Banks having interest, that has been accepted by State Government on the   recommendation of the State Level Industrial Revival Forum.

(xii)                    'Substantial Expansion' in respect of closed or Sick Units" means increase by not less then 25% in the value of fixed capital investment in plant & machinery of an industrial unit for the purpose of expansion of capacity/ modernization for the manufacture of the same product and or for diversification of the same unit so as to also manufacture new item/ items with an approved capacity;

(xiii)                  "Incentives" means any relief or concessions granted by State Government;

(xiv)                   "Earlier Incentive Schemes" mean any earlier Incentive Scheme administered by the Department of Industries the State Government;

(xv)                    "Eligible Unit" means a Weak/Closed/ Sick Unit to which the 2004 Scheme is applicable and the rehabilitation or revival proposal in respect of which has been accepted by State Government and which has as a consequence thereof, been granted eligibility certificate under the 2004 scheme by the DOI.

(xvi)                   "Fixed Assets" means the land, building, plant & Machinery and equipment installed for pollution control measures of the unit.

(xvii)                 "Capital Investment" means investment made in land, building plant and machinery and equipment installed for pollution control measures in respect of any Unit;

(xviii)                "Year" means, unless otherwise specifically stated and not repugnant to the context, the financial year commencing from the Ist April and ending on the 31^st March following.

(xix)                  " State Level industrial Revival Forum" means the forum constituted as under for making the recommendations to the State Government for accepting Rehabilitation Proposal & Revival Proposals.

5. Applicability of the 2004 Scheme

5.1               The 2004 Scheme shall be applicable to all "Closed"/ "Sick"/ "Weak" units as defined proposing the rehabilitation or revival of such Units and also to the expansion in respect of registered "Closed", "Weak" or "Sick" Units if forming a part of such rehabilitation or revival proposals as accepted by State Government.  Such registered Units can be in the private sector, co-operative sector and or joint sector.

5.2               Incentives disbursed to such Units under any earlier Incentive Schemes shall continue to be governed by the provisions of the registration and sanctions already issued under the respective schemes.

5.3               Provided further that sick Units that have been registered and for which eligibility certificates have been issued in terms of any other Incentives Scheme, but in respect of which no Incentives have been actually disbursed, may opt for registration under the 2004 scheme, if the rehabilitation or revival proposals otherwise fulfill the terms and conditions under the 2004 Scheme.

6. Eligibility criteria for the 2004 Scheme

6.1                                 Any Unit to which this Scheme applies, shall be considered for grant of registration and eligibility certification provided;

a)      The rehabilitation or revival proposal is submitted to the State Level industrial Revival Forum as a comprehensive scheme duly supported by Financial Institutions and/or Banks having interest, statutory creditors, in acknowledgement of the potential viability of the Unit and such proposal is accepted by State Government;

b)       The rehabilitation or revival proposal is submitted to the State Level Industrial Revival Forum and has the support of any intending Financial Institutions or Banks in respect of the term-borrowing or working capital requirements under the proposal and such proposal is accepted by State Government.

c)       The rehabilitation or revival proposal shall also include a substantial investment by the entrepreneur/promoter proposing its rehabilitation or revival.

d)       No revival proposal shall be considered in respect of "Weak", "Sick" or "Closed" Units under the 2004 Scheme, which in the opinion of the Financial Institutions and /or Banks having interest or an intended interest in them, have become weak or sick or have closed down on account of willful mismanagement, willful default, unauthorized diversion of funds, dispute among promoters/ partners or due to internal managerial deficiencies.

e)       Provided further that no revival proposal shall envisage any Electricity Duty Concession as provided under the 2004 scheme in respect of “Weak”, “Sick” or “closed” induction furnace/ rolling mills units etc. and other such industries where power is the main raw material.  

6.2                                 The State Government shall have the right to accept either in whole or in part or reject any proposal as at para 6.1 above, or to determine the total quantum of concessions/ relief under this scheme solely at its discretion and without assigning any reasons thereof.  

7          Coverage of eligible Units under the 2004 Scheme

 7.1 Eligible Units may be granted any or all of the incentives or support measures as the case may be, under the 2004 scheme in the matter outlined below subject to acceptance by State Government of their rehabilitation or revival proposals,

(a)                 Grant of a flexible and comprehensive package of incentives or support measures based on the merits of accepted proposals for rehabilitation or revival;

(b)                 Laying down of any general or specific conditions for the operation of such a package based on the merits of accepted proposals for rehabilitation or revival.  

8. Classification of areas

a)                         For the purpose of determination of types and quantum of incentives available under the 2004 Scheme to eligible Units, the area of the State shall be classified as Category ‘A’ , ‘B’, “C’ as per Rule 5. of the “Rules Regarding Grant of Incentives, Concessions and Facilities to Industrial Units in Himachal Pradesh, 2004” as amended from time to time.

9.         Incentives for the Revival of eligible "Closed" Units.

9.1        An eligible "closed" Unit which is proposed to be restarted by a new entrepreneur/promoter by either purchasing the unit entirely or after being taken over by new promoters by way of change of 100% management/ promoter directors, and proposing its rehabilitation by way of restarting the unit, bringing in new technology, putting in additional finances in the project will be eligible to be considered for grant of the following concessions:

9.1.1     Interest Subsidy: Eligible Units can be reimbursed an Interest subsidy to the extent of 25% of the annual interest liability on the loan required to be borrowed from a Commercial Bank/Financial Institution/Co-operative banks/NBFC approved by the Reserve Bank of India for implementing the accepted rehabilitation or revival proposal subject to a limit of Rs. 5 lakhs in case of units located in Category “A” Areas per year and 10 lakhs in case of units located in Category ‘B’ and ‘C’ Areas per year depending on the location of the Unit and covering the periods of rehabilitation or revival or as specified below whichever is earlier;

(a)                 “Category ‘A’ Areas” - 1 year

(b)                 “Category ‘B’ and ‘C’ Areas”-3 years.

9.1.2                      Waiver of Electricity Duty:

Eligible Units can be granted the incentive of payment of concessional rate of electricity duty @10Paisa per unit on the electricity consumed for its production activities under the accepted rehabilitation or revival proposal for a maximum period of upto 3 years.

9.1.3                      Disposal of surplus Land assets:-  Eligible Units can be allowed to unbundle idle and surplus land assets through the participating rehabilitation financial institution to generate augmentable resources for investment in their rehabilitation or revival, provided it forms a part of means of finance to meet its rehabilitation or revival cost in accordance with an accepted rehabilitation or revival proposal and subject to the fulfillment of conditions as per the existing policy package of State Government or as may be laid down by the Government at the time of giving such permissions.

9.1.4                      Rescheduling of arrear Sales Tax dues:-  Eligible Units can be considered for rescheduling the arrears of their sales tax dues by way of deferment upto a maximum period of 5 years of such arrears of Sales tax dues.

10.        Incentives for the Rehabilitation or Revival of eligible "Sick" Units.

10.1 Interest Subsidy: Eligible Units can be reimbursed an Interest subsidy to the extent of 25% of the annual interest liability on the loan required to be borrowed from a Commercial Bank/Financial Institution/Co-operative banks/NBFC approved by the Reserve Bank of India for implementing the accepted rehabilitation or revival proposal subject to a limit of Rs. 5 lakhs in case of units located in ‘A’ Category Areas per year and Rs. 10 lakhs in case of units located in ‘B’ and ‘C” Category Areas per year depending on the location of the Unit and covering the periods of rehabilitation or revival or as specified below whichever is earlier;

(c)                 Category ‘A’ Areas - 1 year

(d)                 Category ‘B’ and ‘C’Areas-3 years.

10.3 Exemption from Payment of Electricity Duty:-

Eligible Units can be granted exemption from payment of duty on the electricity consumed for its production activities under the accepted rehabilitation or revival proposal for a maximum period of upto 5 years.

10.4 Disposal of surplus Land assets:-  Eligible Units can be allowed to unbundle idle and surplus land assets through the participating rehabilitation financial institution to generate augmentable resources for investment in their rehabilitation or revival, provided it forms a part of means of finance to meet its rehabilitation or revival cost in accordance with an accepted rehabilitation or revival proposal and subject to the fulfillment of conditions as per the existing policy package of State Government or as may be laid down by the Government at the time of giving such permissions.

10.5 Rescheduling of arrear Sales Tax dues:-  Eligible Units can be considered for rescheduling the arrears of their sales tax dues by way of deferment upto a maximum period of 5 years of such arrears of Sales tax dues.

10.6 Consideration for the concessional rate of GST & CST:- Eligible Units can be considered for the concessional rate of GST & CST on their product by the State Government so as to ensure that the rate of GST and CST is at par with those prevailing in the adjoining Sates and that it is necessary for their rehabilitation or revival provided it forms a part of an accepted rehabilitation or revival proposal and is specifically recommended by the 'State Level Industrial Revival Forum'.  

11. Support measures for the Revival of eligible "Weak" Units

11.1            Exemption from payment Electricity Duty: Eligible Units can be granted exemption from payment of duty on the electricity consumed for their manufacturing activities for a period of 3 years or the period of revival, whichever is earlier under the accepted revival proposal.

11.2            Disposal of Surplus Land assets:  Eligible Units can be allowed to unblock their idle and surplus land assets through the participating rehabilitation financial institution to generate augmentable resources for investment in its revival provided it forms a part of means of finance to meet its rehabilitation or revival cost in accordance with an accepted revival proposal and subject to the fulfillment of conditions as per the existing policy package of State Government.

Consideration for the concessional rate of GST & CST:-

11.3             Eligible Units can be considered for the concessional rate of GST & CST on their product by the State Government so as to ensure that the rate of GST and CST is at par with those prevailing in the adjoining Sates and that it is necessary for their rehabilitation or revival provided it forms a part of an accepted rehabilitation or revival proposal and is specifically recommended by the 'State Level Industrial Revival Forum'.

12.Power to amend: -

12.1 Notwithstanding anything contained in any of the provisions of the 2004 scheme, the State Government may at any time-

(a)                 Make any amendment to this Scheme;

(b)                 Make any relaxation in applying the provisions of this Scheme but such relaxation shall be effected on the merits of the approved scheme in each case;

(c)                 May issue instructions and guidelines to facilitate implementation, to remove anomalies and to clarify the interpretations of the provisions of the Scheme.