Modified Special Incentive Package Scheme - Features, Benefits, & Eligibility

Electronic items are the 3rd largest imported goods, with an estimated expenditure of $200 billion by 2022. It shows the electronic goods industry’s unevolved condition to fulfil the domestic demand.

Therefore, Ministry of Electronics & Information Technology launched the Modified Special Incentive Package Scheme. This scheme aims to encourage extensive manufacturing in Electronics System Design and Manufacturing.

Keep reading to know further about this scheme.

M-SIPS provides a subsidy to invest in the expenditure of electronic goods manufacturing. Indian Government launched this scheme in July 2012.

Initially, it was accepting applications till 26th July 2015. However, our Government decided on 30th January 2017 to extend this scheme’s tenure till 2018.

The objectives of this scheme are as follows -

• Attract investment in the Electronics System Design & Manufacturing.
• Boosting the production of electronics goods by developing electronic manufacturing units.
• Making India self-sufficient to fulfil India’s domestic demand for electronic items.
• Employment generation.

Below are some salient features of the Modified Special Incentive Package Scheme:

• This scheme provides a capital subsidy to the investors of SEZ and non-SEZ.
• Both new and expanding electronic manufacturing units receive incentives.
• Reimbursement on excise duties and central tax is available for high capital investment units.

The benefits of this scheme are as follows -

• Investors will receive a 20% capital subsidy for investing in Special Economic Zones (SEZs).
• They will receive a 25% of the same for units out of Special Economic Zones.
• Incentives will be available for 44 categories of products across the value chain. Those include raw materials from the assembly, testing, and packaging. In addition, the product verticles also comprise raw material for chips, accessories and components.
• These incentives will be available for the next 10 years of the approval of the application.
• This scheme also provides reimbursement of excise for capital assets for the non-SEZ units.
• Hi-tech and giant asset investment units will also receive central duties and taxes reimbursement.

Followings are the eligibility criteria to apply for Modified Special Incentive Package Scheme:

• Investors must invest a minimum of ₹ 1 crore for accessories manufacturing to apply for this scheme. Additionally, a minimum ₹ 5000 crores threshold should be for semiconductor fabrication units.
• The units must be in the industrial area notified by the Central or State Government.