Karnataka Industrial Policy for MSME
Karnataka is the fourth largest and one of the fastest growing States in India with a INR 16,99,115 crore economy growing at around 10.00 per cent at current prices as per Economic Survey of Karnataka 2019-20. Karnataka has carved out a niche for itself in the global market as the knowledge and technology capital of the country. The State is spearheading the growth of Indian industry, particularly in the areas of electrical and electronics, information & communication technology (ICT), biotechnology, nanotechnology, pharmaceutical, aerospace and nano machinery 4.0.
Through the Industrial Policy 2020-25, Karnataka Government has taken many initiatives to enhance its stature as one of the leading high-tech industrialized States in the country and is in the forefront of attracting investments from across the country and abroad in disruptive technologies.
Realizing the importance of MSMEs role in the growth of Karnataka’s Economy, the Govt. has provided the following incentives and concessions
Starting date: 13th August, 2020
Ending date: 13th August, 2025
Incentives for MSMEs
1. Investment Promotion Subsidy
|
|
Category |
% of VFA |
Turnover % |
Max Period |
Max Subsidy |
|
A |
Micro Enterprises - General Category |
|
|
|
|
|
|
Zone 1 |
30% |
10% |
5 Years |
Rs. 25 Lakhs |
|
|
Zone 2 |
25% |
10% |
5 Years |
Rs. 20 Lakhs |
|
|
Zone 3 |
Nil |
Nil |
Nil |
Nil |
|
B |
Micro Enterprises - Special Category |
|
|
|
|
|
|
Zone 1 |
35% |
10% |
5 Years |
Rs. 30 Lakhs |
|
|
Zone 2 |
30% |
10% |
5 Years |
Rs. 25 Lakhs |
|
|
Zone 3 |
10% |
10% |
5 Years |
Rs. 10 Lakhs |
|
C |
Small Enterprises - General Category |
|
|
|
|
|
|
Zone 1 |
25% |
10% |
5 Years |
Rs. 100 Lakhs |
|
|
Zone 2 |
20% |
10% |
5 Years |
Rs. 90 Lakhs |
|
|
Zone 3 |
Nil |
Nil |
Nil |
Nil |
|
D |
Small Enterprises - Special Category |
|
|
|
|
|
|
Zone 1 |
30% |
10% |
5 Years |
Rs. 105 Lakhs |
|
|
Zone 2 |
25% |
10% |
5 Years |
Rs. 95 Lakhs |
|
|
Zone 3 |
10% |
10% |
5 Years |
Rs. 25 Lakhs |
|
E |
Additional Subsidy - Special Category |
|
|
|
|
|
|
Zone 1 |
5% |
10% |
5 Years |
Rs. 5 Lakhs |
|
|
Zone 2 |
5% |
10% |
5 Years |
Rs. 5 Lakhs |
|
|
Zone 3 |
Nil |
Nil |
Nil |
Nil |
|
F |
Medium Enterprises |
|
|
|
|
|
|
Zone 1 |
40% |
2.5% |
6 Years |
- |
|
|
Zone 2 |
35% |
2.5% |
5 Years |
- |
|
|
Zone 3 |
Nil |
Nil |
Nil |
- |
Note:
- MSMEs can avail an investment promotion subsidy to an extent of percentage of turnover in each financial year for a maximum period as above from the date of commercial production. The investment promotion subsidy is limited to either the specified period or VFA limits or max subsidy limits whichever is reached earlier.
- For Medium Enterprises Minimum Direct Employment should be 20 Nos. for 1st INR 10 Crore & 7 employment for every additional investment of INR 10 crore
2. Stamp Duty Exemption
|
|
Category |
Rate of Subsidy |
|
A |
MSMEs - General Category |
|
|
|
Zone 1 |
100% |
|
|
Zone 2 |
100% |
|
|
Zone 3 |
Nil |
|
B |
MSMEs - Special Category |
|
|
|
Zone 1 |
100% |
|
|
Zone 2 |
100% |
|
|
Zone 3 |
75% |
3. Concessional Registration Charges
|
|
Category |
Rate of Subsidy |
|
A |
MSMEs - General Category |
|
|
|
Zone 1 |
Rs.1 per Rs.1000 |
|
|
Zone 2 |
Rs.1 per Rs.1000 |
|
|
Zone 3 |
Nil |
|
B |
MSMEs - Special Category |
|
|
|
Zone 1 |
Rs.1 per Rs.1000 |
|
|
Zone 2 |
Rs.1 per Rs.1000 |
|
|
Zone 3 |
Rs.1 per Rs.1000 |
Note:Stamp duty and registration charges arise in the following events
- Loan Agreements, Credit deeds, mortgage and hypothecation deeds executed for availing loans from various financial institutions
- Lease deeds, lease-cum-sale, sub-lease and absolute sale deeds executed by industrial enterprises in respect of industrial plots, sheds, industrial tenements, flatted factories
- Purchase of land and registration of final sale deed
4. Reimbursement of CLU Fee
|
|
Category |
Rate of Subsidy |
|
A |
MSMEs - General Category |
|
|
|
Zone 1 |
100% |
|
|
Zone 2 |
100% |
|
|
Zone 3 |
Nil |
|
B |
MSMEs - Special Category |
|
|
|
Zone 1 |
100% |
|
|
Zone 2 |
100% |
|
|
Zone 3 |
75% |
5. Exemption from tax on Electricity Tariff
|
Category |
Rate of Subsidy |
|
|
A |
MSMEs - General Category |
|
|
|
Zone 1 |
100% for 7 Years |
|
|
Zone 2 |
100% for 6 Years |
|
|
Zone 3 |
Nil |
|
B |
MSMEs - Special Category |
|
|
|
Zone 1 |
100% for 8 Years |
|
|
Zone 2 |
100% for 7 Years |
|
|
Zone 3 |
100% for 4 Years |
6. Power Subsidy
|
Category |
Rate of Subsidy |
|
All micro and small enterprises in all zone and all categories |
Rs. 1 per unit consumed for 3 years |
7. Interest Subsidy only for Technology Upgradation
|
Category |
Rate of Subsidy |
|
|
A |
MSMEs - General Category |
|
|
|
Zone 1 |
5% for 6 Years |
|
|
Zone 2 |
5% for 5 Years |
|
|
Zone 3 |
5% for 5 Years |
|
B |
MSMEs - Special Category |
|
|
|
Zone 1 |
5% for 6 Years |
|
|
Zone 2 |
5% for 5 Years |
|
|
Zone 3 |
5% for 5 Years |
8. Technology Adoption
|
|
Category |
Rate of Subsidy |
Max Subsidy |
|
A |
MSMEs in all zones - General Category |
25% of Cost |
Rs. 50,000 |
|
B |
MSMEs in all zones - Special Category |
50% of Cost |
Rs. 1 Lakh |
Note: Applicable on loans availed from KSFC & Scheduled Commercial Banks which are not covered under CLCSS of Govt. of India.
9. Technology Business Incubation Center
|
|
Category |
Rate of Subsidy |
Max Subsidy |
|
A |
MSMEs in all zones - General Category |
25% of Cost |
Rs. 50 lakh |
|
B |
MSMEs in all zones - Special Category |
50% of Cost |
Rs. 60 lakh |
10. Quality Certifications
|
|
Category |
Rate of Subsidy |
Max Subsidy |
|
A |
ISO Series |
|
|
|
|
MSMEs in all zones - General Category |
75% of Cost |
Rs. 75,000 |
|
|
MSMEs in all zones - Special Category |
75% of Cost |
Rs. 1 Lakh |
|
B |
BIS Certification |
|
|
|
i |
MSMEs in all zones - General Category |
|
|
|
|
BIS Certification Fee |
50% of Cost |
Rs. 20,000 |
|
|
Purchase of Testing Equipment |
25% of Cost |
Rs. 50,000 |
|
ii |
MSMEs in all zones - Special Category |
|
|
|
|
BIS Certification Fee |
50% of Cost |
Rs. 25,000 |
|
|
Purchase of Testing Equipment |
25% of Cost |
Rs. 1 Lakh |
|
C |
WEConnect Certification for women |
|
|
|
|
MSMEs in all zones and all categories |
100% of Certification fee - 1st year |
Rs. 30,000 |
|
|
|
90% of Certification fee - 2nd year |
Rs. 27,000 |
|
|
|
80% of Certification fee - 3rd year |
Rs. 18,000 |
11. Rain Water Harvesting
|
|
Category |
Rate of Subsidy |
Max Subsidy |
|
A |
MSMEs in all zones - General Category |
50% of Cost |
Rs. 2 Lakh |
|
B |
MSMEs in all zones - Special Category |
75% of Cost |
Rs. 2.5 Lakh |
12. Waste Water Recycling
|
|
Category |
Rate of Subsidy |
Max Subsidy |
|
A |
MSMEs in all zones - General Category |
50% of Cost |
Rs. 7.5 Lakh |
|
B |
MSMEs in all zones - Special Category |
75% of Cost |
Rs. 8.5 Lakh |
13. Water Audit Expense Reimbursement
|
Category |
Rate of Subsidy |
Max Subsidy |
|
|
A |
MSMEs in all zones - General Category |
75% of Cost |
Rs. 1 Lakh |
|
B |
MSMEs in all zones - Special Category |
75% of Cost |
Rs. 1 Lakh |
14. Zero Discharge Technology adoption
|
|
Category |
Rate of Subsidy |
Max Subsidy |
|
A |
MSMEs in all zones - General Category |
50% of Cost |
Rs. 7.5 Lakh |
|
B |
MSMEs in all zones - Special Category |
75% of Cost |
Rs. 8.5 Lakh |
15. Electronic & Plastic waste recycling
|
|
Category |
% of VFA |
Max Subsidy |
|
A |
MSMEs in all zones - General Category |
5% |
Rs. 10 Lakh |
|
B |
MSMEs in all zones - Special Category |
5% |
Rs. 12 Lakh |
16. Effluent Treatment Plant
|
|
Category |
Rate of Subsidy |
Max Subsidy |
|
A |
MSMEs in all zones - General Category |
50% of Cost |
Rs. 50 Lakh |
|
B |
MSMEs in all zones - Special Category |
75% of Cost |
Rs. 60 Lakh |
List of Eligible Services Industries
- Powder coating / Chrome plating / Industrial Electro plating /Painting Enterprises, Industrial paintings engaged in job work.
- Weigh bridges set up within the KIADB / KSS1DC industrial areas / estates.
- Material / Product Testing Laboratory.
- Off-set printing, digital printing (excluding digital photo printing, flex printing)
- Common Effluent Treatment Plant.
- Industrial Hazardous waste management facility
- General Engineering, Fabrication
- Flour Mill
- Logistic Facilities supporting to Industries
- Dry Ports (ICD/ CFS/ AFS)
- Industrial warehousing in Industrial areas / estates ( > 50,000 sq.ft of storage area) including material handling equipment (except transport vehicles & goods carriers)
- Cold Storages ( > 20,000 sq. ft. of storage area) facility supporting other than Agro and Food processing industry.
- Free Trade Warehouse Zones (FTWZ)
List of Ineligible Activities / Enterprises
- Breweries & Distilleries of all types excluding winery & ethanol plant established as integral part of sugar industry.
- 2Khandasari and Jaggery making enterprises.
- Photo Studios & Colour Processing and instant photo printing Enterprises.
- Photo Copying / Xerox Machines / Fax Machines / Data Entry / Data Recovery enterprises.
- Fertilizer mixing units.
- All types of Saw Mills excluding manufacture of particle board / Low Density Fiber Board (LDF)/Medium Density FiberBoards(MDF)/High Density Fiber Boards(HDF).
- Beedies / Cigarettes / Cigars / Gutka & Tobacco based products manufacturing enterprises.
- Azoic / Reactive Dyes manufacturing enterprises.
- Fire Cracker manufacturing enterprises.
- Industries manufacturing Ozone depleting substances.
- Laundries including Power Laundries.
- Brick making Enterprises excluding Cement Hollow / Solid Blocks, Wire Cut, Fly Ash Bricks and Refractory Bricks.
- Poultry including hatcheries.
- Popcorn and Ice candy making Enterprises excluding Ice Cream Manufacturing.
- Coffee roasting and grinding units having installed capacity of less than 2MT a day
- Clock and Watch / Mobile! Computer and Hardware equipment repair enterprises.
- Cassette recording [Audio & Video] enterprises.
- Cyanide Manufacturing enterprises.
- Mining and Mining Equipment.
- Lime kiln / burnt lime units.
- X-ray clinics and clinical / pathological laboratories and scanning, MRI testing enterprises.
- All industries of mobile nature like rigs, concrete / tar mixing plants / hot-mix plants including site oriented plants / industries.
- Units engaged in manufacture of Chrysolite Asbestos (White Crystal).
- All types of Saloon / Spas! Massage Centres, etc.
- All types of hotels / restaurants! resorts / amusement parks, etc.
- Vermi compost
- Roof top solar power generation.
- Bottling of LPG and other gases.
- Aggregators/ supply chain business Enterprises related to / supporting bio-fuel manufacturing units
Our Unique Services
- Preparation of Detailed Project Reports (DPR)
- Layout Drawings
- Facilitating various permissions required from various Govt. Departments
- Error free application processing for various subsidies and incentives
- Facilitating the arrangement of subsidies and incentives from Govt. Departments
- Advisory on Purchase of Machinery / Technology and Civil works
