Tamil Nadu Industrial Policy - 2021

This Policy is applicable for projects establishing or expanding industrial units, industrial parks, R&D projects, warehousing and logistics except those specified in the negative list in Annexure I. Investments made from January 1, 2021, will be considered eligible for availing incentives. This Policy supersedes the Tamil Nadu Industrial Policy 2014 and will be valid till 31.03.2025. The Policy may be periodically revised from time to time.

A. Incentives for industries:

Investment Commitment Range for Project Category

Project Category	Investment Commitment Range (Rs. in cr.)		Standard Investment Period
	Minimum Investment	Maximum Investment
Sub-large	50	300	4 years
Large	300	500	4 years
Mega	500	5000	4 years
UltraMega	5000	-	7 years

1. Investment Promotion Subsidy:

a. SGST Reimbursement for Final Products-

100% SGST payable on the sale of final products manufactured, sold, and registered in the State shall be reimbursed for a period of 15 years from the date of commercial 22 production or upon achieving the minimum eligible investment for Structured Package in the given District, whichever is later.

b. Fixed Capital Subsidy-

Project/District Category	Fixed Capital Subsidy (%EFA)
	Large (Rs. 300 cr.– Rs. 500 cr. & 150 jobs)	Mega (Rs. 500 cr. – Rs 5000 cr. & 400 jobs)	Ultra-Mega (>Rs. 5000 cr. & 2000 jobs)
A District	10%	10%	20%
B District	12%	12%	22%
C District	10%	15%	25%

c. Flexible Capital Subsidy-

• 35% of EFA for “A” Districts
• 37% for “B” Districts
• 40% of EFA for “C” Districts.

This comprises Standard Subsidy of 5% to all eligible projects and additional incentives of up to 35% of EFA depending on boosters based on location, employment, exports, ecosystem creation and if it is in a sunrise sector.

d. Turnover-based Subsidy (TBS)-

Project/District Category	Turnover-based Subsidy (% Turnover) for Mega and Ultra Mega Projects (Investment >Rs. 500 cr.)
	Employment >2000 jobs	Employment >4000 jobs
A District	1.5%	1.75%
B District	1.75%	1.8%
C District	1.8%	2%

2. Training Subsidy:

• Training Subsidy of Rs. 4000 per worker per month for 6 months for residents of Tamil Nadu.
• For women and transgender employees, persons with benchmarked disabilities, persons from SC/ST communities the training subsidy shall be Rs. 6000 per worker per month for 6 months.

3. Land Cost Incentive:

For eligible projects in SIPCOT in “A” & “B” districts, land allotment will be made at a 10% concessional rate and at a 50% concessional rate in “C” districts for land up to 20% of EFA.

4. Interest Subvention:

Interest Subvention of 5% as a rebate in the rate of interest shall be provided to Ultra Mega Projects only on actual term loans taken for the purpose of financing the project, up to Rs. 4 cr. per annum for a period of 6 years.

5. Standard Incentives:

a. Electricity Tax Incentive

Electricity tax exemption for a period of 5 years on power purchased from the Tamil Nadu Generation and Distribution Corporation Ltd.

b. Stamp Duty Incentive

• 50% Concession on Stamp duty payable on lease or purchase of land/shed/buildings
• 100% Concession on Stamp duty payable on lease or purchase of land/shed/buildings

Green Industry Incentive

25% subsidy on the cost of setting up such environmental protection infrastructure in the following solution areas subject to a limit of Rs. 1 cr.

B. Special Incentives for sunrise sectors:

1. Land Cost Subsidy:

For eligible projects in SIPCOT, land allotment will be made at 10% concessional rate in “A” & “B” districts and at a 50% concessional rate in “C” districts For private land in “C” districts, 50% subsidy will be offered .

2. Stamp Duty Incentive:

100% stamp duty exemption will be given for lease or purchase of land/ shed/ buildings meant for industrial use in land obtained from SIPCOT.

3. Enhanced Incentive for Quality Certification:

Projects obtaining certifications like ISO, ISI, BIS, FPO, BEE, AGMARK, and ECOMARK or any other national or international certification shall be given a subsidy of 50%

4. Interest Subvention:

Project Category	Interest Subvention (% Rate of Interest)	Maximum Incentive Disbursal Period (Years)	Ceiling per annum (Rs, lakhs)
Large	5%	6	20
Mega	5%	6	100
Ultra-Mega	5%	6	400

5. Standard Incentives:

1. a. Electricity Tax Incentive
   Electricity tax exemption for a period of 5 years on power purchased from the Tamil Nadu Generation and Distribution Corporation Ltd.
2. b. Stamp Duty Incentive
   
   • 50% Concession on Stamp duty payable on lease or purchase of land/shed/buildings
   • 100% Concession on Stamp duty payable on lease or purchase of land/shed/buildings
3. c. Green Industry Incentive
   25% subsidy on the cost of setting up such environmental protection infrastructure in the following solution areas subject to a limit of Rs. 1 cr.

C. Special Incentives for industrial parks:

1. Capital Subsidy:

• 50% of the amount determined as Capital Subsidy upon paid-up allotment of 50% park area along with 10% operational units, i.e. either 10% of units achieving commercial production or units occupying 10% of park area achieving commercial production. This shall be distributed in equal annual installments over 5 years.
• 50% of the amount determined as Capital Subsidy upon paid-up allotment of 75% park area with 25% operational units, i.e. either 25% of units achieving commercial production or units occupying 25% of park area achieving commercial production. This shall be distributed in equal annual installments over 5 years.

2. Industrial Housing Incentive:

Housing Incentive of 10% on the cost of developing the residential facilities developed within the Industrial Park over 10 years from the date of completion of the investment in the housing facility, subject to a ceiling of Rs. 10 cr.

3. Green Industry Incentive:

Eligible for a 25% subsidy on cost of capital of setting up undertaking such initiatives, subject to a limit of Rs. 5 cr.

D. Special Incentives for R&D projects:

1. Land Cost Incentive for Standalone R&D Projects:

incentive of 50% of the cost of purchase or lease of land for up to 20 acre, subject to a ceiling of Rs. 50 lakh/acre.

2. Standard Incentives:

• a. Electricity Tax Incentive
  Electricity tax exemption for a period of 5 years on power purchased from the Tamil Nadu Generation and Distribution Corporation Ltd.
• b. Stamp Duty Incentive
  
  • 50% Concession on Stamp duty payable on lease or purchase of land/shed/buildings
  • 100% Concession on Stamp duty payable on lease or purchase of land/shed/buildings
• c. Green Industry Incentive
  25% subsidy on the cost of setting up such environmental protection infrastructure in the following solution areas subject to a limit of Rs. 1 cr.

E. Special Incentives for sub-large projects:

1. Capital Subsidy:

• Capital subsidy of Rs. 1 cr. Upon the completion of the investment within the standard investment period of 4 years.
• Sub-Large Projects in “C” Districts can avail a Fixed Capital Subsidy of 5% of EFA upon the completion of the investment, disbursed in equal annual installments over 5 years.

1. a. Stamp Duty Incentive:
   50% Concession on Stamp duty payable on lease or purchase of land/shed/buildings
2. b. Green Industry Incentive:
   25 % subsidy on the cost of setting up such environmental protection infrastructure in the following solution areas subject to a limit of Rs. 1 cr.

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