46 XX | Enlightener Series | F. State Government Schemes | F.5 West Bengal Government's Banglashree for MSMEs (Part 1 of 2)

Disclaimer….before you read ahead!
The information contained herein is of a general nature and for information purposes only, with the intent of raising awareness around various resources, schemes etc. available for women entrepreneurs in India. It is not intended to address the circumstances of any particular individual or entity. It does not purport to be all-inclusive or necessarily contain all the information that may be relevant for the reader, and may be subject to updation, revision or amendment. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to remain accurate in the future. The reader, therefore, is required to exercise their discretion; and not act on such information without appropriate professional advice after a thorough examination of the particular situation.

Furthermore, we are not a lender and are not authorized by the Reserve Bank of India to act as one. By disseminating the information contained herein, we are not soliciting any borrower or customers for the company or organization mentioned herein nor do we intend to syndicate any capital for the reader of this email.

About this scheme…

Banglashree Scheme for MSMEs Scheme (Banglashree) comprises of various fiscal incentives provided by State Government of West Bengal with the aim of encouraging entrepreneurs to set up Micro, Small and Medium Enterprises (MSMEs) across West Bengal resulting in new employment generation and widening the area of operations such that West Bengal emerges as the MSME leader in the country.

Banglashree for MSMEs Scheme is focused on MSMEs in the manufacturing sector alone. Effective on and from April 1, 2020, it shall remain in force for a period of five years ending on March 31, 2025, if not withdrawn or amended earlier. You may read more about Banglashree Scheme for MSMEs here

How is it being implemented?

Under Banglashree Scheme, direct subsidies are given to Micro, Small & Medium Enterprises (MSMEs) operating in manufacturing sector.

Furthermore, under this Scheme, additional subsidies are given to MSMEs wholly owned by women, SC/ST, and minority community entrepreneurs across certain fiscal incentives.

What’s on offer?

I. Product

To first identify which zonal classification your business fall under, please refer to Page 6 of the Scheme here.

State Capital Investment Subsidy: Covered in detail in our last week’s release here
Interest Subsidy on Term Loan:
- Subsidy or concessions on annual interest liability on Term Loans borrowed from Lender for implementation of new or expansion projects
  - Lender comprises of Commercial Banks, Financial Institutions (Central and State), Co-operative Banks, Scheduled Banks approved by RBI, Regional Rural Banks (RRBs)
  - Term Loan means loan secured from Lender for acquiring fixed capital assets in the form of land, building, plant and machinery, tools & implements, appliances etc.
- Quantum of subsidy:
  - For Micro & Small Enterprises in:
    - Zone A & Zone B – 55% of annual interest liability for 5 years
    - Zone C, Zone D & Zone E – 70% of annual interest liability for 5 years
  - For Medium Enterprises in:
    - Zone A – nil
    - Zone B, Zone C, Zone D & Zone E – 25% of annual interest liability for 5 years up to ₹1.75 Crores per year
- Disbursement:
  - Direct annual disbursement of interest subsidy subject to submission of statement or certificate issued by Lender to substantiate MSME has paid due interest on due dates and has not defaulted in payment of interest at any time during the period. Format of such certificate is provided in Annexure II of the Scheme on Page 27 here
  - For more information on this, please contact District Industries Centre (DIC) in your respective District via means mentioned below

Subsidy on Stamp Duty and Registration Fee:
- Subsidy or concessions on stamp duty and registration fee paid for the purpose of registration of documents within the State for the purpose of
  - Purchase of land and/or buildings; or land, building or shed taken on lease for at least 10 years at any Government or Government approved Industrial Park or Estate; for setting up new or expansion project
- Quantum:
  - For Micro & Small Enterprises in:
    - Zone A – 25% of stamp duty & registration fee paid
    - Zone B – 50% of stamp duty & registration fee paid
    - Zone C – 75% of stamp duty & registration fee paid
    - Zone D & Zone E – 100% of stamp duty & registration fee paid
  - For Medium Enterprises in:
    - Zone A – nil
    - Zone B, Zone C, Zone D & Zone E – 75% of stamp duty & registration fee paid
  - Amount admissible will be calculated proportionately based on & of land or buildings used for setting up new or expansion project
- Disbursement:
  - The entire amount of sanctioned subsidy is likely to be disbursed at one go. For more information on this, please contact District Industries Centre (DIC) in your respective District via means mentioned below

Subsidy for State Goods and Services Tax (SGST):
- Subsidy or concessions on Net SGST paid to Government of West Bengal on new or expansion projects
- Quantum: For Micro, Small & Medium Enterprises in:
  - Zone A – nil
  - Zone B & Zone C – 30% of Net SGST paid for 8 years from the date of commencement of commercial production with cumulative refund not exceeding 75% of Fixed Capital Investment (FCI)
  - Zone D & Zone E – 50% of Net SGST paid for 8 years from the date of commencement of commercial production with cumulative refund not exceeding 75% of FCI
  - For confirmation on whether such subsidy is calculated on Net SGST paid as suggested above or total amount of SGST paid (excluding input credit) as required to be certified as per Form-D or Form E mentioned below, please contact District Industries Centre (DIC) in your respective District via means mentioned below
  - FCI comprises of investment made in plant & machinery on or after April 1, 2018. For more information on this, refer to Page 3, 4, 5 and 6 of the Scheme here
- Disbursement:
  - Direct annual disbursement of SGST subsidy subject to submission of receipt copy of the application submitted to the Commissioner, Commercial Tax, West Bengal on SGST in Form-D or Form-E. Format of application is provided in the Scheme on Page 35 & 36 here
  - For more information on this, please contact District Industries Centre (DIC) in your respective District via means mentioned below

Waiver of Electricity Duty: Will be covered in our next release
Power Subsidy: Will be covered in our next release
Subsidy for Energy Efficiency: Will be covered in our next release
Subsidy for Water conservation/Environment Compliance: Will be covered in our next release
Subsidy for Standard Quality Compliance: Will be covered in our next release
Work Force Welfare Assistance: Will be covered in our next release
Subsidy for Patent Registration: Will be covered in our next release

II. Purpose:

State Capital Investment Subsidy: Covered in detail in our last week’s release here
Interest Subsidy on Term Loan: Acquisition of fixed assets
Subsidy on Stamp Duty and Registration Fee: Purchase or lease of land or building or shed
Subsidy for SGST: SGST paid on goods manufactured and sold

III. Borrower Type:

Private Sector (Sole Proprietorship, Partnership, LLP, LLC, Private Company, Public Company etc.), Cooperative Sector, Joint Sector Undertaking, Companies/Undertakings owned & managed by State Government, Companies/Undertakings owned & managed by Industrial SHGs

IX. Turnaround Time

It takes about 100 days for the disbursement of subsidy under this Scheme to come through once the application is submitted with required documents
- Submission of application to receipt of intimation of approval/rejection – 60 days
- Receipt of approval to intimation of sanction – 20 days
- Receipt of sanction to disbursement – 20 days

Interested? Read ahead to check your eligibility….

I. Is yours a Micro or Small or Medium Enterprise per the MSMED Act 2006 with an Udyog Aadhaar Registration?

II. Is yours a business in the manufacturing sector and that does not fall in the negative list of industries? Please refer to Page 29 of the Scheme here

III. Is your business located in West Bengal in either of the Zones A, B, C, D or E? To identify which zonal classification your business fall under, please refer to Page 6 of the Scheme here

IV. Is the expenditure or expenses for which subsidy is being availed under this Scheme, made after April 1, 2018?

In case your business has commenced commercial production on or post April 1, 2019 and until March 31, 2025, is the subsidy being availed for a new or expansion project?

OR
In case your business has commenced commercial production before April 1, 2019, and is looking to avail the following subsidy(ies), is the subsidy being availed for an expansion project alone?

State Capital Investment Subsidy, Interest Subsidy on Term Loan, Subsidy for Energy Efficiency, Subsidy for Water conservation/Environment Compliance, Subsidy for Standard Quality Compliance, Work Force Welfare Assistance, and Subsidy for Patent Registration For information on subsidy eligible on expansion project, please refer to Clause 20 on Page 10 and the Definition & Explanation under “Expansion of Existing Enterprise” on Page 2 of the Scheme here

VI.

In case your business has commenced commercial production on or post April 1, 2019 and until March 31, 2025, is the first incentive application under Banglashree Scheme for MSMEs has been/is being made within 12 months from the date of commencement of commercial production or 12 months from the date of notification of Banglashree Scheme for MSMEs (i.e. July 22, 2020), whichever is later?

OR
For timing of application of subsidy under this Scheme for an expansion project for business that has commenced commercial production before April 1, 2019, please contact DIC in your respective District via means mentioned below

VII.

Is the new project or expansion project under question approved before its implementation by (a) any Directorate under the Department of Micro, Small &Medium Enterprises and Textiles, Government of West Bengal, or (b) concerned DIC, or (c) Micro Small and Medium Enterprises Development Institute (MSME-DI), Government of India, or (d) Food Processing Industries and Horticulture Department, Govt. of West Bengal, or (e) Commercial Banks / Financial Institution (Central and State ) / Co-Operative Banks/Scheduled Banks approved by RBI / Regional Rural Banks (RRBs), financing the project?

OR
In case your new project or expansion project is envisaged to be financed from own sources, can you provide a declaration regarding source of finance supported by a certificate issued by a Chartered Accountant as per Annexure VI of Banglashree Scheme for MSMEs? For Annexure VI, please refer to Page 31 of the Scheme here

VIII. Your business has not availed any claim sought under this Scheme under any other Incentive or Subsidy Scheme of Government of India or State Government?

If your answers to the questions above are an emphatic YES, you are all set to avail fiscal incentives under Banglashree for MSMEs Scheme!

You may also read more on the eligibility criteria on Pages 2, 4, 5 and 6 of the Scheme here

So…how big is this scheme and what has been done so far?

I. Latest details around Banglashree doesn’t seem to be available in public domain

II. A budget allocation of ₹100 Crores for fiscal year 2020-21 was made towards the Banglashree for MSMEs Scheme

III. Under the previous avatar of Banglashree Scheme for MSMEs namely, West Bengal Incentive Scheme (WBIS) 2013 for MSMEs which lapsed on March 31, 2018, 520 units had claimed for subsidy

So, now, how should you go about it?

I. For submitting application, please register and apply online here

II. For information on application form for the Scheme, list of documentation required, standard operating procedures and timelines: