Circular No.40/2021, Land Cost Incentive Policy of SIPCOT

What the circular governs

Circular No.40/2021 of the State Industries Promotion Corporation of Tamilnadu Limited sets out how land cost incentives apply to industrial land allotted in listed SIPCOT Industrial Parks. Industries in the Negative List in Annexure I are excluded.

The policy applies according to the location of the industrial park and the date on which the allotment application was received. It does not describe incentives for private land outside SIPCOT Industrial Parks.

Who is affected

Circular No.40/2021 affects industries applying for land allotment in the listed SIPCOT Industrial Parks. Applicants must commit to creating Eligible Fixed Assets and providing minimum employment of 50 persons within the applicable investment period.

Applications for parks in A districts are covered if received on or after 1 January 2021. Applications for parks in B and C districts are covered if received on or after 1 February 2021.

Key provisions

A and B district parks

• Land is allotted at the normal allotment rate applicable at the time of allotment.
• A 10 percent land cost incentive is provided as a back ended incentive for the allotted extent.
• The incentive is capped at 20 percent of Eligible Fixed Assets.
• The project must be implemented within 36 months, or within another period stated in the allotment order.
• The allottee must create the Eligible Fixed Assets committed in the application and employ at least 50 persons within four years or seven years, depending on the project category, or within a period fixed by a specific Government Order.
• Companies must provide certification from Statutory Auditors. Other legal entities must provide certification from Tax Auditors.

Listed A district parks include Irungattukottai, Sriperumbudur, Oragadam, Pillaipakkam, Vallam Vadagal, Siruseri, Gummidipoondi, Thervoykandigai and Mappedu. Listed B district parks include Ranipet, Hosur, Bargur, Perundurai and Manaparai.

C district parks

• Land is allotted at a 50 percent subsidised rate as a front ended benefit.
• The allottee must provide the prescribed undertaking before execution of the lease deed.
• The same project implementation, Eligible Fixed Assets and minimum employment requirements apply.
• The land cost subsidy cannot exceed 20 percent of Eligible Fixed Assets.
• Failure to comply can lead to recovery of the subsidy with interest fixed by the State Industries Promotion Corporation of Tamilnadu Limited or the Government.

The listed C district parks are Cheyyar Phase I and Phase II, and Cuddalore Phases I and II. Their stated plot allotment rate is Rs.80 lakh per acre and the subsidised rate is Rs.40 lakh per acre.