Company needs to return PLI benefits with interest for midway exit: DPIIT
The Department for Promotion of Industry and Internal Trade (DPIIT) clarified on a query relating to PLI disbursement in case investment schedules are not met due to various dynamics and external factors and what would happen if a selected applicant exits midway.
A company availing benefits of production linked incentive (PLI) scheme, if for any reason, fails to make full committed investment and exits midway will have to refund the incentives taken along with interest and its bank guarantee will also be invoked, according to FAQs released by the DPIIT on Monday.
In a set of FAQs on PLI scheme for white goods - ACs and LED lights, the Department for Promotion of Industry and Internal Trade (DPIIT) said that midway exit by a selected applicant without fulfilling investment criteria thwarts one of the selection criteria of maximising gross value added (GVA) to economy, as also deprive selection opportunity to another eligible firm under the scheme.
"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," the FAQs said.
The DPIIT clarified on a query relating to PLI disbursement in case investment schedules are not met due to various dynamics and external factors and what would happen if a selected applicant exits midway.
The scheme for white goods, notified in April, would provide financial incentive to boost domestic manufacturing and attract large investments in the white goods manufacturing value chain. It was approved with a budgetary outlay of Rs 6,238 crore. It will be implemented over 2021-22 to 2028-29.
It has also clarified that in case an applicant does not meet criteria of threshold investment and net incremental sales for any given year, it would not be eligible for disbursement of incentive for that particular financial year.
However, it added that the applicant will not be restricted from claiming incentive for subsequent years during the tenure of the scheme, provided eligibility criteria of cumulative committed investment and threshold net incremental sales are met for such subsequent financial years.
Further, it stated that LLPs are not covered under the Companies Act 2013, and they cannot avail the benefits under this scheme, besides an applicant which is availing benefits under any other PLI scheme of the government for the same product(s).
Besides, value-added resellers also do not qualify under the scheme.
Regarding when will the PLI be disbursed, it said that actual disbursement of the PLI for a respective year will be subsequent to that year.
"For example, if the applicant chooses initial investment period as 1st April 2021 to 31st March 2022 then subject to fulfilling the conditions of cumulative threshold investment up to FY 2021-22 over base year and threshold incremental sales of manufactured goods over the base year in FY 2022-23, PLI will be disbursed in FY 2023-24," it added.
Edited by Anju Narayanan