Gujarat government announces Aerospace and Defence Policy 2016

Gujarat Government on 21 December 2016 announced Aerospace and Defence Policy 2016. The policy was announced with an aim to attract investment into fields of aerospace and defence design, development and manufacturing in the state.

The policy announced a fortnight ahead of the Vibrant Gujarat Summit is offering several incentives and benefits to the investors.

Highlights of the Aerospace and Defence Policy 2016

• 100 percent reimbursement will be provided to Investors on stamp duty and registration charges that are paid for purchase, lease or mortgage of land that is meant for setting up/developing the facility in the areas of Aerospace and Defence (A&D).

• In cases where the manufacturing facility will be established in government lands, the investors will be allotted the land at 50 percent of prevailing market rate (jantri rates) decided by the government.

• To conduct tests and trials of the equipment that is manufactured in the state, the government will provide all the required assistance for developing the infrastructure on PPP model.

• MSME units will be provided with a cash subsidy of 25 percent on capital investment for setting up their facility in the Aerospace and Defence sector.

• For a period of five years, all mega and A&D projects will be entitled to 2 percent interest subsidy on external borrowings.

• On the tax front, the policy says that all units would be given reimbursement up to 100 per cent of the Central Sales Tax or net Value Added Tax. The policy says, “The reimbursement will be limited to 90 percent 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”.

• For a period of five years, all A&D units would be provided 100 percent exemption on electricity duty. This exemption will be provided from the date of commencement of production.

Besides, the entrepreneurs will be provided with a subsidy of 50 percent of the construction cost of the R&D centre. The facility will be provided to encourage research and development activities in the state.