Gujrat govt announces Aerospace and Defence Policy

Aiming to attract investment into fields of aerospace and defence design, development and manufacturing in Gujarat, the state government today announced Aerospace and Defence Policy-2016 offering a slew of benefits and incentives for investors.

Under the policy, investors will be entitled to get 100 per cent reimbursement on stamp duty and registration charges paid for purchase, lease or mortgage of land meant for setting up the facility in the areas of Aerospace and Defence(A&D).

In case a government land is available to set up the manufacturing facility in this sector, investors will be alloted land at 50 per of prevailing jantri rates (market rate decided by government), a government release stated.

To conduct tests and trials of defence equipment manufactured in the state, government would also consider to provide all the required assistance to develop the infrastructure on PPP model.

The government has also made a provision of giving cash subsidy of 25 per cent on capital investment made by MSME units to set up their facility in the A&D sector, said the release.

For a period of five years, mega as well as large A&D projects will be entitled to get 2 per cent interest subsidy on external borrowings.

On tax front, all units would be given reimbursement up to 100 per cent of the net Value Added Tax or Central Sales Tax. “The reimbursement will be limited to 90 per cent of the fixed capital investment made by the unit within three years for mega A&D units, 2 years for large A&D units and one year for SME,” it said.

As per the policy, all A&D units would be provided 100 per cent exemption on electricity duty for a period of five years from the date of commencement of production.

To encourage research and development activities, entrepreneurs would get 50 per cent subsidy on the construction cost of R&D centre, according to the release.