The Department for Promotion of Industry and Internal Trade (DPIIT) revised guidelines for the PLI scheme for white goods, offering some relaxations.
It also said that a company availing benefits under scheme, if for any reason fails to make full committed investment and exits midway, will then have to refund the incentives taken along with interest. In addition, the bank guarantee will also be invoked, according to frequently asked questions released by the DPIIT.
“Therefore, if any selected applicant declines the offer of approval under the scheme at any stage or exits the scheme without making full committed investment for reasons whatsoever; in such case, the bank guarantee furnished by the selected applicant shall be invoked as per the provisions…the applicant shall have to refund the incentive availed by it under the scheme till such date along with interest calculated at the prevailing three year SBI MCLR compounded annually,” it said.
As far as relaxations are concerned, it has allowed inclusion of more LED components such as resistors, fusers, LED transformers, among others, in the target segments and eligible products. Similarly, pre-qualification criteria can be met on the basis of audited financials for 2020-21.
“However, for applicants meeting the pre-qualification criteria on the basis of financial attributes of audited financial statements of FY21, the computation of net incremental sale of eligible product shall be done on the basis of net sales turnover of eligible products in the base year of FY21, whichever is higher,” it said.
Till now, FY20 was treated as the base year for computing cumulative incremental investment, sales as well as financial attributes under pre-qualification criteria.
“The Government has issued a corrigendum and related FAQs with respect to the PLI Scheme for white goods. Various relaxations have been provided so as to encourage industry participation-pre-qualification criteria can also now be met basis audited financials for FY 20-21; additional components included in the Target segments for LED (Components),” Abhishek Jain, Tax Partner, EY, said.
“However, to have only serious players apply for the scheme, exit clause, triggering invocation of bank guarantee and refund of incentive alongwith interest, also inserted in the guidelines,”Jain said.
The PLI scheme for white goods, which got the Cabinet’s approval in April, aims to create a complete component ecosystem in India and make India an integral part of the global supply chains. The budgetary outlay for the scheme is Rs 6,238 crore.
The scheme will offer an incentive of 4%-6% on incremental sales of goods manufactured in India to companies engaged in manufacturing of ACs and LED Lights. New On News