MSMEs: Tamil Nadu offers incentives to promote production of Covid-19 combat gears

    The Tamil Nadu government on Thursday announced a special incentive package to industries, including GST, MSMEs, to manufacture the necessary equipment to combat Covid-19. The state government said it will encourage companies to manufacture invasive ventilators, N-95 masks, PPE, multi-parameter ICU monitors and anti-viral drugs used to treat Covid-19. Manufacturers have been told to commence production before July 31, 2020.

    Sops for manufacturers include waiving off any prior approval and 30% capital subsidy subject to a ceiling of Rs 20 crore on the investment made in eligible fixed assets.

    The capital subsidy will be disbursed as equal instalments over five years against investments made for making essential equipment, including modifications and upgrades of existing lines, the state government said. A 6% interest subvention will also be provided to manufacturers on working capital loans availed from commercial banks. Waiver of 100% stamp duty will also be provided.

    The government believes it is essential to augment the local manufacturing capacity of essential medical equipment and drugs by implementing a special incentive package to promote manufacturing. SIPCOT and SIDCO will provide necessary land and sheds on short- or long-term leases on priority, according to a government order (GO).

    In the case of MSMEs, eligible manufacturing activities will be included under the category of ‘thrust sector’ for availing various applicable existing incentives. The GO said investors may commence manufacturing of these items and related activities without any prior approval. A minimum of 50% of the equipment and drugs produced under the package during the three months – May to July – would be purchased by Tamil Nadu Medical Services Corporation at negotiated rates.

    Earlier, the state government asked the Centre to increase supply of test kits and other items such as PPEs, N-95 masks and ventilators, apart from seeking Rs 9,000-crore assistance. It has also asked the Centre to relax the fiscal deficit limit and increase the additional borrowing limit.

    Chief minister K Palaniswami said he had also requested Prime Minister Narendra Modi via video conference for a sum of Rs 3,000 crore to purchase protective gear. This was in addition to Rs 9,000 crore sought to address Covid-19 challenges. He said the GST compensation amount due for December-January 2019-20 can be released immediately, along with grants under the National Health Mission.

    Source- Financial Express.

The post MSMEs: Tamil Nadu offers incentives to promote production of Covid-19 combat gears appeared first on GST Station.

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