Guidelines for the Production
Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry
[Ministry
of Heavy Industries Notification S.O. 3947(E) dated 23rd
September 2021]
Subject: Guidelines for the Production Linked Incentive (PLI) Scheme for
Automobile and Auto Component Industry
1. Background
2. Definitions
3. Tenure of the Scheme
4. Eligibility
5. Application
6. Online Portal
7. Project Management Agency (PMA)
8. Approval under the Scheme
9. Post Approval
10. Calculation of Incentive
11. Disbursement of Incentives
12. Review
13. Residual
14. Guidelines for PLI
Scheme for Drone and Drone components
15. List of Advanced
Automotive Technology products (Prescribed by MHI from time to time)
1.
Background
1.1
The Production Linked Incentive (PLI)
scheme for Automobile and Auto components (herein after referred to as
“Scheme”) has been notified vide notification S.O. No. 3946(E) dated
23.09.2021.
1.2
In pursuance of Para – 7 of said
notification and for the effective operation and smooth implementation of the
Scheme, the following guidelines are being laid down
that are to be read along with the scheme. In case of any inconsistency between
the scheme and the guidelines, the provisions of the scheme shall prevail.
1.3
The automotive industry is a major
economic contributor in India. The sector is responsible for ~ 35% of India’s manufacturing GDP and has been a key growth driver
for the economy. Today, many component makers are Tier 1 suppliers to global
auto OEMs and several India-manufactured motor vehicles make their way to
international markets. This demonstrates that the Indian automotive sector has
been an adopter of global technological changes and other global standards.
1.4
The Production Linked Incentive (PLI)
Scheme for Automobile and Auto components proposes financial incentives to
boost domestic manufacturing of Advanced Automotive Technology products and
attract investments in the automotive manufacturing value chain. Its prime
objectives include overcoming cost disabilities, creating economies of scale
and building a robust supply chain in areas of Advanced Automotive Technology
products. It will also generate employment. This scheme will facilitate the
Automobile Industry to move up the value chain into higher value added
products.
1.5
These guidelines are
being issued for effective and smooth implementation of the Scheme.
These guidelines cover, inter alia, the following:
· Definitions
· Tenure
· Eligibility
· Application and Online Portal
· Project Management Agency (PMA) and
Empowered Committee (EC)
· Approval under the Scheme
· Calculation and disbursement of
incentive
2.
Definitions
2.1. Applicant: An applicant for the purpose of the
Scheme should be a company or its Group Company(ies)
incorporated under The Companies Act in India, engaged in automotive and/or
auto component manufacturing sector or New Non-Automotive Investor company
or its Group Company(ies) (who are currently not in
automobile or auto component manufacturing business) meeting the eligibility
criteria specified under the scheme and making an application for seeking
approval under the Scheme.
2.2.
Application: Application
submitted by an applicant to the Ministry of Heavy Industries (MHI) as per the
Application Form prescribed under these guidelines containing requisite
information, along with supporting documents and application fee. The
Application Form shall be notified separately in due course of time.
2.3.
Application Approval Date: The
date on which approval letter under the Scheme is issued
by the MHI.
2.4.
Application Window: Applications
will be invited within 60 days of notification of this
scheme. The window for receiving applications through the Notice Inviting
Applications will be for a period of 60 days.
2.5
Approved Applicant/Company: The
eligible company or its Group company(ies) who has been approved by MHI under the Scheme.
2.6.
Automotive OEM: The
original manufacturer of a vehicle, including tractor and automobile meant for
military use and/or vehicle aggregates.
2.7.
Base Year: Financial
Year 2019-20 for calculation of eligible sales value (not applicable for New
Non-Automotive investors).
2.8.
Completely Built-in Unit (CBU): This
is a vehicle that is in a completely assembled form.
2.9.
Completely Knocked Down (CKD): A
vehicle as a Completely Knocked Down(CKD) kit
containing all the necessary parts for assembling a complete vehicle with chasis, engine, gearbox, transmission mechanism not in a
pre-assembled condition.
2.10.
Eligible Product:
i. Pre-approved Advanced Automotive Technology Vehicles and
pre-approved Advanced Automotive Technology Components of all vehicles, CKD/SKD
kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles,
commercial vehicles and tractors including automobile meant for military use.
ii.
The list of Advanced Automotive
Technology Vehicles and Advanced Automotive Technology Components will be prescribed and can be amended by MHI from time to time
depending upon technological developments.
2.11.
Eligible Sales Value and Determined Sales Value under the Scheme:
I.
Eligible Sales Value for Vehicle Segment: Total sales (Net of GST) for
eligible vehicles.
II.
Eligible Sales Value for Component Segment: Total sales (Net of GST) for
eligible components Or apportioned value
of eligible component as determined by Testing Agency of MHI.
III.
Determined Sales Value for Vehicle Segment: (Eligible Sales Value for
Vehicle Segment for a particular year) minus (Eligible Sales Value for Vehicle
Segment for Base year).
IV.
Determined Sales Value for Component Segment :( Eligible Sales Value for
Component Segment for a particular year) minus (Eligible Sales Value for
Component Segment for Base year).
2.12 Empowered Group of Secretaries (EGoS):As
approved by the Cabinet on 11th November 2020, the Empowered Group of
Secretaries (EGoS) chaired by Cabinet Secretary
(constituted by the Cabinet vide Gazette notification dated 10.06.2020) will
monitor the PLI scheme, undertake periodic review of the outgo under the
scheme, ensure uniformity of all PLI Schemes and take appropriate action to
ensure that the expenditure is within the prescribed outlay. In addition, any changes required in
the modalities of the scheme mentioned in the Draft Cabinet Note, subject to
the condition that the overall financial outlay remains within ₹
25,938crore, will be placed for consideration of EGoS.
2.13
Financial Year: Financial
Year begins on the 1st April of a year and ends on
31st March of the following year.
2.14
Fixed Assets: Fixed
asset is an asset held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in the normal
course of business e.g., Property, plant and equipment etc.
2.15
Force Majeure: Extraordinary
events or circumstances beyond human control, such as event described as an act
of God (like a natural calamity) or events such as a war, strike, public health
emergency, riots, crimes (but not including negligence or wrong-doing,
predictable/ seasonal rain and any other events specifically excluded).
2.16
Global Group Revenue:
Total revenue of the group companies from global operations (from automotive
and auto component manufacturing in a given year).
2.17
Group Companies2: Group Company(ies) shall mean two or
more enterprises which, directly or indirectly, are in a position to:
Exercise
twenty-six percent or more of Voting rights in the
other enterprise;
Or
Appoint
more than fifty percent of members of Board of Directors in the other
enterprise (As defined in the FDI Policy Circular of 2020).
2.18
Global Net Worth: It
refers to the Gross Net worth of a company or its Group company(ies) from all operations i.e. Domestic as well as Foreign,
of all assets (Domestic plus Foreign) less all liabilities (Domestic plus
Foreign).
2.19
Investment- “Investment”
as mentioned in Para -3.2(c) of the scheme shall mean:
2.19.1
Expenditure incurred on Plant,
Machinery, Equipment and Associated Utilities: This shall include expenditure
on plant, machinery, equipment and associated utilities as well as tools, dies,
moulds, jigs, fixtures (including parts, accessories,
components and spares thereof) of the same, used in the design, manufacturing,
assembly, testing, packaging or processing of any of the eligible products
under the scheme. It shall also include expenditure on packaging,
freight/transport, insurance, and erection and commissioning of the plant,
machinery, equipment, and associated utilities. Associated utilities would
include captive power and effluent treatment plants, essential equipments required in operations area such as clean rooms,
air curtains, temperature and air quality control systems, compressed air,
water and power supply, and control systems. Associated utilities would also
include IT and ITES infrastructure related to manufacturing including servers, softwares, and ERP solutions. All non-creditable taxes and
duties would also be included in such expenditure.
2.19.2
Expenditure incurred on Land and
Building: The expenditure incurred on land will not be
considered for meeting the threshold criteria of Cumulative Minimum
Domestic Investment. However, buildings of the main plant and utilities will be considered as part of the investment provided it
does not exceed 10% of Minimum Cumulative Domestic Investment defined for a
segment.
2.20
Incentive: Incentive
is the financial benefit to be provided to the
selected applicants.
2.21
Manufacturing: In
accordance with Central Goods and Services Tax (CGST) Act, 2017, manufacturing
shall mean processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name,
character and use and the term “manufacturer” shall be
construed accordingly.
2.22 Net Sales: Net sales are the sum of a company’s gross sales minus its
returns, allowances, and discounts.
2.23 New Non-Automotive Investor company or its Group company(ies): New Non-Automotive
Investor company or its Group company(ies) will be defined
as those who have no revenue from manufacturing of Automobile or auto
components as on 31.03.2021.
2.24 Project Management Agency (PMA): Refers to the financial
institution(s) or any other authority(ies) appointed
by MHI to act on its behalf for receipt and appraisal of applications,
verification of eligibility and examination of disbursement claims through any
method / document deemed appropriate
and for managing the above-mentioned in accordance with these guidelines.
2.25 Semi-Knocked down Unit (SKD): Semi-Knocked Down (SKD) is a vehicle as a knocked down kit containing all
the necessary parts, sub-assemblies for assembling a complete vehicle with
engine, gearbox, transmission in pre-assembled condition but not mounted on a
chassis or a body assembly.
2.26 Value Addition: The term “Value addition” will be construed
as the percentage of manufacturing activity being undertaken in that referred
part of the supply chain. % domestic value addition=[(Ex-factory
price of the product (net of GST) – (minus) Import content i.e. sum of FOB
value of all imported components or materials in the final product including
import duties) / Ex-factory price of the product (net of GST)] x 100.It will be
certified by Testing agency of MHI.
2.27 Vehicle Aggregates: Vehicle aggregate is a sub-assembly / combination of different
components for a defined vehicle model that are combined
to provide a specific functionality to the vehicle. Aggregates of a vehicle
typically include body shell / chassis, engine, transmission, suspension,
steering systems, wheel assemblies, brake systems, seats etc.
3. Tenure of the Scheme: Incentive under the scheme will be
applicable, starting from the Financial Year 2022-23 which will be disbursed in
the following Financial Year i.e. 2023-24 and so on for a
total of five (05) consecutive Financial Years.
4. Eligibility
4.1. Eligibility: The applicant company or its Group company(ies) will need to meet the following common criteria to
qualify and receive benefits under the Scheme:
Basic Eligibility Criteria:
(a) For company or its Group company(ies) with existing presence in India or globally in the
Automotive vehicle and components manufacturing business:
|
Eligibility Criteria |
Auto OEM |
Auto-Component |
|
Global group* Revenue (from automotive and/or auto
component manufacturing) |
Minimum ₹ 10,000 crore. |
Minimum ₹ 500 crore. |
|
Investment |
Global Investment of Company or its Group* Company(ies) in fixed assets
(gross block) of ₹ 3,000 crore. |
Global Investment of Company or its Group* Company(ies) in fixed assets
(gross block) of ₹150 crore. |
*Group
Company(ies) shall mean two
or more enterprises which, directly or indirectly, are in a position to:
Exercise
twenty-six percent or more of voting rights in the other enterprise;
Appoint
more than fifty percent of members of Board of Directors in the other
enterprise (As defined in the FDI Policy Circular of 2020).
Note:
i. Above Eligibility criteria to be met based on audited financial statements for year ending
March 31, 2021.
ii.
An applicant company or its Group company(ies) must satisfy the
entire eligibility criteria to be eligible under the scheme.
(b)
For new non-automotive investor company
or its Group company(ies)
that may want to participate in this scheme:
|
Eligibility Criteria |
New Non-Automotive investor company or
its Group company(ies) (who are currently not in
automobile or auto component manufacturing business) |
|
Global net worth |
₹ 1000crorebased on audited financial
statements for year ending March 31, 2021. |
|
Committed investment in India over five year period |
As per Minimum New Domestic Investment Conditions
mentioned in para – 4.1(c) below. |
Note :
i. Non-Automotive company or its Group company(ies) can qualify for this scheme provided they present a
clear business plan to invest in India and generate revenues from Advanced
Automotive Technology vehicles or Advanced Automotive Technology components
manufacturing.
ii.
The applicant new Non-Automotive Investor company or its Group company(ies) will be eligible to
claim incentive subject to meeting cumulative minimum new domestic investment
to be achieved for a particular year. The applicant will also have to meet the % Year on Year growth criteria from the minimum threshold
fixed from the first year.
iii. New Non-Automotive Investor company or its Group company(ies) will be defined as those who have no revenue from
manufacturing of Automobile or automobile components as on 31st March 2021.
iv.
An applicant new Non-Automotive
Investor company or its Group company(ies) must satisfy the entire eligibility criteria.
(c)
Minimum New Domestic Investment Conditions:
Cumulative
New Domestic Investment Condition of Performance (₹.Crore)
|
Cumulative
new domestic investment to be achieved |
Champion OEM
(Except 2W & 3W) |
Champion OEM
2W & 3W |
Component
Champion |
New
Non-Automotive investor(OEM) company or its Group company(ies) |
New
Non-Automotive investor (Component) company or its Group company(ies) |
|
Upto or before
March 31, 2023 |
300 |
150 |
40 |
300 |
80 |
|
Upto or before
March 31, 2024 |
800 |
400 |
100 |
800 |
200 |
|
Upto or before
March 31, 2025 |
1400 |
700 |
175 |
1400 |
350 |
|
Upto or before
March 31, 2026 |
1750 |
875 |
220 |
1750 |
440 |
|
Upto or before
March 31, 2027 |
2000 |
1000 |
250 |
2000 |
500 |
Note :
i. New investments should be made
from the same legal entity as the one applying for the incentive.
ii.
Cumulative new domestic investment made starting 1st April 2021 shall be considered under this condition.
iii.
The approved Company is required to meet the cumulative investment condition
for each year.
iv.
In the event, any approved company meets the investment condition few years
before the end of the scheme; it will be eligible for incentives throughout the
tenure of the scheme subject to meeting other conditions of the scheme.
v.
In case the approved company fails to meet the cumulative domestic investment
condition in any given year, it will not receive any incentive for that year even
if the threshold for Determined sales value is
achieved. However, it will still be eligible to receive the benefits under the
scheme in the following years if it meets the cumulative domestic investment
condition defined for that year.
(d)
Preference will be given to eligible
company or its Group company(ies)
committing to front load their investment during the scheme period. Proposed
investment commitment will be evaluated by calculating
the Net Present Value (NPV) of the investment using the bank rate as the
discounting factor.
4.2.
Eligibility for incentive
4.2.1
Approved Applicants would be eligible
for incentives subject to meeting specific criteria under the scheme, as
prescribed.
4.2.2
Minimum 50% domestic value addition
will be required. Phased Manufacturing Programme
similar to FAME-II Scheme will be followed.
Methodology of determination of domestic value addition will be same as in FAME
scheme. Testing Agency of MHI will certify domestic value addition in the
eligible product.
4.2.3
Pre-approved eligible product with
minimum 50% domestic value addition will be eligible for incentive under this
scheme.
4.2.4
The scheme is
designed to incentivize Advanced Automotive Technology products only viz eligible Advanced Automotive product on standalone basis
at component level or in integration with the vehicle having appropriate value
apportionment on the vehicle side. Therefore, an approved
legal entity as Automotive OEM company or New Non-Automotive Investor company
can avail incentives under both components of the scheme subject to the
condition that any eligible product shall be incentivized only once under the scheme.Any double claim of incentive for the same product
under component level and vehicle level can lead to disqualification of the
legal entity/entities involved on this ground alone in addition to any other
legal action as applicable under the law.
4.2.5
Champion OEM Incentive Scheme
4.2.5.1
Automotive OEM company or its Group company(ies) and new
Non-Automotive investor company or its Group company(ies)
are eligible to apply for the scheme.
4.2.5.2
Incentives are applicable on Battery
Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments – 2 wheelers,
3 wheelers, passenger vehicles, commercial vehicles, Tractors and automobile meant
for Military use and any other Advanced Automotive Technology vehicle
prescribed by MHI depending upon technical developments.
4.2.6.
Component Champion Incentive Scheme
4.2.6.1
Automotive OEM company or its Group
company(ies), Auto-component manufacturing company or
its Group company(ies) and new Non-Automotive
Investor company or its Group company(ies) are
eligible to apply for the scheme.
4.2.6.2
Incentives are applicable on
pre-approved Advanced Automotive Technology components of all vehicles, CKD/SKD
kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles,
commercial vehicles and tractors including automobile meant for military use
and any other Advanced Automotive Technology component prescribed by MHI
depending upon technical developments.
5.
Application
5.1.
The window for receiving applications
through the Notice Inviting Applications will be for a period of 60 days.
The
applicant companies are required to submit an application along with financial
& supporting documents.
Note: Documents required for verifying
eligibility for both the components of the scheme will include, but not be
limited, to the following:
·
Audited
financial statements (Profit & loss, balance sheet) of the legal entity
applying for the scheme as well as that of the global group company.
·
For
base lining and establishing incentives, eligible sales value in the base year
and domestic investment made starting from 01.04.2021, if any, the applicant
needs to furnish a statutory auditor’s certificate.
·
The
documents should be audited and validated by a statutory
auditor.
5.2
The Application Form: The
Application Form along with details of all necessary supporting documents, to be submitted at the time of application, will be notified
separately by Ministry of Heavy Industries (MHI) in due course of time.
5.3
A non-refundable application fee would
be payable for each application.
6.
Online Portal
6.1.
All applications will
be submitted through an online portal maintained by the PMA. In case the
portal is not available, applications may be submitted
in physical form to the PMA.
6.2.
Upon successful submission of an
application, PMA will issue a unique Application ID to the applicant for all
future references pertaining to the Scheme.
6.3.
URL of the online portal will be made available on the website of the MHI, in due
course.
6.4
The scheme will be data driven to
ensure transparency, automaticity and prompt disbursement of incentives. The
data will be captured in seamless manner and will make
use of respective HS codes.
6.5
Provision for Online Application, Monitoring and Review for Approval of
Advanced Automotive Technology product:
6.5.1
There will be provision in the Online
Portal for making online application by the applicants for approval of their
Advanced Automotive Technology product by the Testing Agency of MHI as per the
list of Advanced Automotive Technology product prescribed by MHI from time to
time.
6.5.2
Testing Agency will take final decision
on the application for Approval of Advanced Automotive Technology product
within 90 days.
6.5.3
Monthly review will
be done at Secretary, MHI level for monitoring of timely disposal of the
applications.
6.6
The disbursement mechanism will
incorporate pre-approval of Advanced Automotive Technology vehicles &
Advanced Automotive Technology components by MHI through its agencies as is
being done under Phased Manufacturing Programme (PMP)
in FAME-II scheme. Subsequently, there would be drop-down menu for submission
of data for claims in the data driven system.
6.7
Pre-approval of Advanced Automotive
Technology vehicles & Advanced Automotive Technology components will be done by Testing Agencies of MHI. Pre-approval
will be done within 90 days from the date of application by the applicant.
6.8
MHI may separately issue detailed instructions
for the use of online portal for the PLI scheme.
7.
Project Management Agency (PMA)
7.1.
The Scheme will be implemented through
a Project Management Agency (PMA) which will be responsible for providing
secretarial, managerial and implementation support and carrying out other
responsibilities as assigned by MHI from time to time. Further, PMA will report
to JS, MHI through the appropriate channel and will be under
the overall control of AS&FA, MHI and will put up their all
findings/observations/recommendations to the Administrative Mechanism created
under FAME-II scheme in MHI.
7.2.
The PMA shall be responsible, inter
alia, for:
7.2.1.
Receipt of applications, examination
and processing of applications and issuing acknowledgements.
7.2.2.
Submission of a fortnightly statement
to MHI about the status of applications received and processed under the
Scheme.
7.2.3.
Making appropriate recommendations
through appropriate channel for approval of applications under the Scheme.
7.2.4.
Verification of thresholds for
determining eligibility for disbursement incentive.
7.2.5.
Examination of claims for disbursement
of incentive and making appropriate recommendations through appropriate
channel.
7.2.6.
Verification of the reconciliation of
disbursement claims with prescribed documents.
7.2.7.
Compilation of data regarding progress
and performance of the Scheme through Quarterly Review Reports and other
information /documents, as required and approved by the competent authority.
7.2.8.
Providing secretarial and other support
to MHI for carrying out its responsibilities.
7.2.9
Keep a check on any diversion arising
out of any change in accounting policy or duplication of benefits on account of same activity under different schemes.
7.3.
The PMA may request for additional
information, details and documents from the applicant as deemed necessary.
8.
Approval under the Scheme
8.1.
The PMA will process the applications
and make appropriate recommendations for approvals under the Scheme.
8.2.
MHI will consider applications, as
recommended by PMA through appropriate channel, for approval under the Scheme.
8.3
To avoid any duplication and formation
of multiple committees, the Administrative Mechanism created under FAME-II
scheme in MHI will be used for granting approvals
under Production Linked Incentive (PLI) Scheme for Automobile and Auto
components.
8.4.
All the applications will
be finalized within 60 days from the date of submission of applications
or receipt of clarification sought, if any.
8.5.
After receiving approval, the PMA will
arrange to issue a letter to the selected applicant within 5 working days,
communicating approval under the Scheme.
8.6.
If a selected applicant is found to be ineligible at any stage, or if it has not
complied with notifications, orders, guidelines etc. of the Scheme, the
envisaged incentive claim of such selected applicant shall be forfeited or
recovered with interest, if already paid.
9.
Post Approval: PMA
shall monitor the progress of the applicants.
10.
Calculation of Incentive
10.1
In order to receive the incentives, the
approved companies need to upload their annual claims under the scheme, along
with audited financial statements / supporting documents, as certified by a
Chartered Accountant and any other document, as specified.
10.2.
Annual payment to be
initiated after review of claims and verification of meeting the
criteria and thresholds.
10.3.
The incentive applicable for the
approved applicant shall be computed as follows:
10.3.1
Champion OEM incentive scheme
I.
The approved applicants will be entitled to receive incentives (% benefit) on Determined Sales Value subject to meeting
other conditions of the scheme.
II.
For the approved New Non-Automotive Investor company
(who is currently not in automobile or auto component manufacturing business)
eligible sales value in the base year will be taken as zero.
III.
Threshold Determined Sales Value for the first year is₹125 crore in
respect of all companies viz. existing Automotive and New Non-Automotive
Investor companies under this component of the scheme to claim incentive.
IV.
Year on Year (YoY) growth of minimum 10% in Determined Sales Value of first
year i.e ₹125 crore has to be
achieved by all approved companies viz. existing Automotive and New
Non-Automotive Investor companies, to become eligible to receive incentive.
V.
In case the approved company fails to meet the threshold for increase in
Determined Sales Value over the threshold for the first year i.e ₹125 crore, for any given year, it will not
receive any incentive for that year. However, it will still be eligible to
receive the benefits under the scheme in the next year if it meets the
threshold for that particular year calculated on the basis of
10% YoY growth over the threshold for the first year and thereafter for 4
consecutive years from when the incentive under the scheme becomes applicable
(FY 2022-23). This provision will provide level playing field to all approved
companies viz. existing Automotive and New Non-Automotive Investor companies as
well as safeguard the approved applicants who preferred to front load their investment,
against adversities of the market demand conditions in subsequent years of the
scheme.
VI.
The approved Companies that achieve a target cumulative increase in Determined sales of ₹10,000crore across the duration
of the scheme will receive an additional incentive of 2%. This additional 2%
incentive is applicable on the cumulative increase in Determined Sales Value in
excess of ₹10,000 crore.
VII.
Incentive proposed under this scheme to electric vehicle manufacturers will be
independent of the incentives given under FAME II scheme where incentives are provided to customers who buy the vehicles and not to
the manufacturers. Incentives can be claimed under this scheme for Battery
Electric vehicles having Advanced Chemistry Cell (ACC) batteries for which
incentives have been claimed under the PLI scheme for ACC.
VIII.
Incentive Slabs for Champion OEM and New Non-Automotive (OEM) Investor company:
Table
1: Incentive Slabs for Champion OEM and New Non-Automotive (OEM)
|
Investor Company |
|
|
Determined Sales Value (in ₹ Crore) |
Incentives (%age of
Determined Sales Value) |
|
<= 2,000 |
13% |
|
> 2,000 to
3,000 |
14% |
|
> 3,000 to
4,000 |
15% |
|
> 4,000 |
16% |
|
Cumulative
Determined Sales Value of ₹10,000 Crores over 5 years |
Additional 2% |
Note:
- i. Only
those Battery Electric Vehicles will be eligible for incentives
which meet the performance criteria of FAME-II scheme or as notified
from time to time by MHI.
10.3.2
Component Champion incentive scheme
I.
The Approved applicants will be entitled to receive
incentives (% benefit) on the Determined Sales Values of Advanced Automotive
Technology components subject to meeting other conditions of the scheme.
II.
For the approved New Non-Automotive Investor company
(who is currently not in automobile or auto component manufacturing business)
eligible sales value in the base year will be taken as zero.
III.
Threshold Determined Sales Value for the first year is₹ 25 crore in
respect of all companies viz. existing Automotive and New Non-Automotive
Investor companies under this component of the scheme to claim incentive.
IV.
Year on Year (YoY) growth of minimum 10% in Determined Sales Value of the first
year i.e. ₹ 25 crore has to be achieved by all approved companies viz.
existing Automotive and New Non-Automotive Investor companies on ₹25
crore, to become eligible to receive incentive.
V.
In case the approved company fails to meet the threshold for increase in
Determined Sales Value over the threshold for the first year i.e ₹ 25 crore, for any given year, it will not
receive any incentive for that year. However, it will still be eligible to
receive the benefits under the scheme in the next year if it meets the
threshold for that particular year calculated on the basis of
10% YoY growth over the threshold for the first year and thereafter for 4
consecutive years from when the incentive under the scheme becomes applicable
(FY 2022-23). This provision will provide level playing field to all approved
companies viz. existing Automotive and New Non-Automotive Investor companies as
well as safeguard the approved applicants who preferred to front load their
investment, against adversities of the market demand conditions in subsequent
years of the scheme.
VI.
The approved Companies that achieve a target cumulative increase in Determined
Sales Value of ₹ 1250 crore across the duration of the scheme will
receive an additional 2% incentive. This 2% additional incentive is applicable
on the cumulative increase in Determined Sales Value in excess of ₹ 1250 crore.
VII.
Additional incentive has also been provided for
components of Battery Electric Vehicles (BEV) and Hydrogen fuel cell vehicles
in order to promote future technology vehicles.
VIII.
Incentive slab for Component Champion Incentive Scheme:
Table
2 : Incentive slab for Component Champion and New
Non-Automotive (Component)
|
Investor company |
|
|
Determined
Sales Value (in ₹ Crore) |
Incentives (%age of
Determined Sales Value) |
|
<= 250 |
8%* |
|
> 250 to
500 |
9%* |
|
> 500 to
750 |
10%* |
|
> 750 |
11%* |
|
Cumulative
Determined Sales Value of ₹1,250 Crore over 5 years. |
Additional 2% |
|
Battery
Electric vehicles & Hydrogen fuel cell vehicles components |
Additional 5% |
*Multiplied
by a factor of 0.9 in the fifth year for eligible sales relating to Internal Combustion
Engine (ICE) vehicle components.
Note:
- i. On an annual basis, the approved
component Champions will have to separately report
break up of sales value of components specific to Battery-EV and Hydrogen fuel
Cell vehicle produced in India as defined in the guidelines.
11.
Disbursement of Incentives
11.1.
For claiming incentive under the
Scheme, the approved applicants will be required to submit claims for
disbursement of incentive to the PMA. The approved applicant must ensure that
the claims are complete in all respects and are accompanied
by all the required documents, as per the format approved by the Ministry.
11.3
The approved applicant may submit a
claim for disbursement of incentive only on an annual basis, that is, for the
eligible sales made and domestic investment done in the period of April to
March, of the said financial year.
11.4
Claim for disbursement of incentive
shall be filed by the approved applicant within 6
(six) months from the end of the financial year to which the claim pertains.
11.5.
The PMA will examine the disbursement
claim as submitted by an approved applicant. The PMA will keep a check on any
diversions arising out of any change in accounting policy or duplication of
benefits on account of same activity under different Schemes. The PMA shall
verify eligibility and assess incentive payable to an
approved applicant based on the method laid down in these guidelines and
arrange to issue the approval letter after necessary approvals, to the
applicant accordingly.
11.6.
The PMA will have the right to verify
any document(s) in relation to the claim for incentive, including, but not
limited to, statutory auditor certificates and returns furnished to various
Ministries / Departments / Agencies. The PMA shall also have the right to
examine the end realization and settlement/ payments corresponding to sales and
investment, respectively, by way of auditor's certificate, bank statements etc.
to the extent deemed necessary.
11.7. In case of any doubt with respect to determining eligibility and
incentive amount due, or any other matter in discharge of its duties and
responsibilities, the PMA may refer such matter to MHI for clarification.
11.8. The PMA shall process claims for disbursement of incentives within
60 days from the date of receipt of such claim (or receipt of clarification
sought, if any) and make appropriate recommendations to the Joint Secretary,
MHI through appropriate channel under the overall control of AS&FA, MHI.
11.9. MHI will consider and approve claims for disbursement of
incentive, as examined and recommended by the PMA through appropriate channel.
11.10. The PMA shall arrange to disburse funds after completion of all
pre-disbursal formalities by the applicant and approval from MHI.
11.11. The disbursement of incentives will be in the form of Direct Bank
Transfer through PFMS or through any other mechanism of adjustment in the name
of the applicant only.
11.12. The approved applicants shall be required to reconcile Domestic
Investment and Determined Sale Value with documents as prescribed by the PMA,
by 31st of December of the financial year subsequent to which the claim
pertains.
11.13. The PMA shall verify the aforesaid
reconciliation. In case of excess claims disbursed, the approved applicant
shall reimburse MHI for any incentive amount refundable, along with interest
calculated at 3 years’ SBI Marginal cost of funds-based lending rate (MCLR) prevailing on the date of
disbursement, compounded annually (for the period between excess payment and
date of refund by the applicant).
11.14. If the PMA or MHI is
satisfied that eligibility under the Scheme and / or disbursement of incentives
have been obtained by misrepresentation of facts or falsification of
information, MHI will ask the approved applicant to refund the incentives,
along with interest calculated at 3 years SBI Marginal cost of funds-based lending rate
(MCLR) prevailing on date of
disbursement, compounded annually, after giving an opportunity to the applicant
of being heard. This is without prejudice to any other action that may be taken under law.
11.15. MHI shall make budgetary provisions for disbursal of incentives
under the Scheme. The PMA will submit budgetary requirements to MHI as a
consolidated amount on quarterly basis.
11.16. The PMA shall furnish information to MHI with details of
disbursement claims received for incentives, amount disbursed, reasons for
rejection and delay in disbursement of the incentives, on a quarterly basis.
12. Review
12.1. Periodic reviews will be undertaken by
the EGoS with respect to progress and performance of
the Scheme.
12.2. All approved applicants shall be required to furnish
self-certified Review Reports on a yearly basis.
12.3. The guidelines can be reviewed and revised by
the competent authority, if required.
13. Residual
13.1. Approved applicant shall intimate the PMA of any change in the
shareholding pattern during the tenure of the Scheme, after updation
with the Registrar of Companies(RoC).
13.2. Any change in the shareholding pattern of an approved applicant
leading to a successor- in interest during the tenure of the Scheme, shall be intimated by PMA for approval of MHI to consider
for disbursal of incentives.
13.3. All transactions by the selected applicant with Related Parties
will be subject to provisions of relevant statutes and Accounting Standards —
18 and corresponding Ind-AS, as amended from time to
time. In case of any proceedings under any Act leading to adjustment of pricing
in the transactions between related parties, effect shall be
given in calculation of incentive and/or eligible threshold investment.
13.4. To obviate any malpractices in the financial matters where disbursements are made to industry by the Government, it has
been decided to provide deterrence against corrupt practices for promotion of
transparency and equity. Therefore, keeping in view the sensitivities involved
in the process and taking cue from the instructions of the Central Vigilance
Commission regarding addition of an Integrity Pact in the matter of
procurement, it has been decided that Applicants shall furnish undertaking
w.r.t. Integrity Compliance duly signed by its authorised
signatory, as will be notified along with the Application Form.
13.5. The undertaking shall be provided by all
applicants whose applications or claims are under consideration for approval or
disbursement of incentives. The applications or claims of those applicants who
do not submit the undertaking shall not be processed and considered. The
undertaking for confirming the compliance of integrity will
be provided by applicants after the submission of claims for
disbursement of incentive and in any case before release of funds. The release
of incentives shall be withheld until the
above-mentioned undertaking is provided.
14. Guidelines for PLI Scheme for Drone and Drone components: Guidelines for the PLI
scheme for Drone and Drone components shall be separately
notified / published by Ministry of Civil Aviation (MoCA).
15. List of Advanced Automotive Technology products (Prescribed by
MHI from time to time):
i. The list of Advance
Automotive Technology Vehicles – The following vehicles are prescribed
by Ministry of Heavy Industries (MHI) as Advance Automotive Technology
Vehicles. The list can be amended by MHI from time to
time depending upon technological developments.
|
Sr. No. |
Description |
|
1 |
Battery Electric vehicles –All vehicle
segments which meet the performance criteria of
FAME-II scheme or as notified from time to time by MHI. |
|
2 |
Hydrogen Fuel Cell Vehicle – All vehicle
segments |
ii.
The list of Advance Automotive Technology Components will be
notified separately by MHI in due course of time.
[F. No. 12 (11)/2020-AEI (21370)]