- M-SIPS scheme provides capital subsidy of 20 per cent in SEZ for units engaged in electronics manufacturing
- The incentives under this scheme are available for 29 electronic verticals
- The corporate tax rate for new manufacturing companies was slashed to 15 per cent from 25 per cent
IT sector is all set to enjoy a double treat. Companies that fall under the Modified Special Incentive Package Scheme (M-SIPS) scheme and have started operations between October 1, 2019, and March 2023, are eligible for a 15 per cent tax rate. They will also be able to enjoy the benefits under the capital subsidy scheme.
M-SIPS scheme provides a capital subsidy of 20 per cent in SEZ for units engaged in electronics manufacturing. The scheme was launched to attract investments in Electronic manufacturing. For some of the high capital investment projects like fabs, it provides for reimbursement of Central Taxes and Duties. The incentives are provided on a reimbursement basis.The scheme was amended on August 3, 2015. It ran from 2012 to 2018.
A senior government official told ET that any new company into manufacturing set up during the relevant period will be eligible. He further added that it cannot avail of any other incentive or holiday under the income tax, but incentives under other schemes can be availed.
Recently Manufacturers Association of Information Technology (MAIT) along with its industry representatives held a meeting with Ravi Shankar Prasad, IT Minister, Ministry of Electronics and Information Technology and other senior Government officials. The agenda of the meeting was to discuss the way forward on the growth of the electronics and IT manufacturing industry in India.
Last month, Finance Minister Nirmala Sitharaman also slashed the effective corporate tax from 30 percent to 25.17 percent.
Earlier, the Ministry of Electronics and Information Technology (MeitY) also proposed new incentives to promote Indian electronics manufacturing. The proposal included a 4-6 per cent interest rate subsidy on loans for new investments, renewal of the electronics manufacturing cluster (EMC) scheme and waiver of collateral for loans taken to set up machinery.