State Profile of Bihar

• Bihar Industrial Investment Promotion Policy (2016)

• Bihar Horticulture Development Society (BHDS), Agriculture Department, Government of Bihar will be the nodal agency for implementation and monitoring of this policy in the state.

• Single Window Clearance System http://udyog.bihar.gov.in/Single-Window-Clearance.aspx

All new units shall be eligible for 100% reimbursement of the electricity duty on power including captive power consumed by the same unit or exported to the BSPHCL from the date of commencement of commercial production for a period of 5 years subject to the overall limit defined above. Electricity duty exemption will not be available on captive power exported to entities other than BSPHCL

• Share of capital subsidy to the eligible investors will be @15% of the eligible project cost to individual investors/ partnership/companies/LLP and @25% to Farmer Producer Companies (FPCs). Scheduled Castes, Scheduled Tribes, and Extremely Backward Classes (EBC) investors will receive an additional 5% capital subsidy, and Women entrepreneurs, acid attack victims, war widows, differently-abled, and third gender investors can avail 2% additional capital subsidy.

• The projects with minimum approved eligible project cost of Rs. 0.25 cr. and maximum of Rs. 5 cr. shall be eligible for availing the benefits under this policy.

• The Capital subsidy support shall be entirely credit-linked and the term loan from the Bank/Financial Institution should not be less than 20% of the project cost.

• Capital subsidy under the said policy is allowed for expansion/modernization of existing projects in the identified sectors, only if the existing capacity of the said project is increased by at least 25% by way of such modernization or expansion or diversification.

• A private industrial park would be eligible for an interest subvention at the rate of 10% or actual rate of interest on term loan, whichever is lower, to the extent of 35% of the approved project cost subject to a limit of INR50 crore

• State shall extend Interest Subvention. to all the eligible units on the term loan availed by the unit from a scheduled nationalized bank or financial institution approved by RBI/SEBI.

• Rate of interest for interest subvention will be 10% or actual rate of interest on term loan, whichever is lower. For micro and small units, there shall an interest subvention of 12%

• The overall limit of this subvention for priority sector units will be 30% of the approved project cost. The subvention limit for non-priority sector units shall be 15% of the approved project cost. The upper limit of this subvention shall be Rs.10 crore.

• Disbursement of the subvention amount would be in instalments linked with the term loan repayment schedule stipulated by the concerned bank/financial institutions which extends the term loan to the unit. Interest shall not be paid on promoter‘s contribution in any form in the unit.

• In case of a new unit established by a SC/ ST entrepreneur, the rate of interest for interest subvention will be 11.5% or actual rate of interest on term loan, whichever is lower (except for Micro and Small units). In case of micro and small units being established by a SC/ ST entrepreneur, the rate of interest for interest subvention will be 13.8% or actual rate of interest on term loan, whichever is lower

• The overall limit of this subvention will be 34.5% of approved project cost (for priority sector projects)/ 17.25% of approved project cost (for non-priority sector projects). The upper limit of this subvention shall be INR 11.5 crore

• No stamp duty to be paid in respect of land allotted by the government to IDA/ BIADA

• 100% reimbursement of stamp duty/registration fees levied on lease/ sale /transfer of industrial land/shed as also those outside the jurisdiction of Bihar Industrial Area Development Authority would be available to all the new units after the unit commences the commercial production. This reimbursement of stamp duty and registration fees will be granted only for the first time and will not be applicable in subsequent stages of lease/sale/transfer. This incentive will be available to new units only.

• 100% reimbursement of ―land conversion fees ―change in land use‖ fees being levied for conversion of agricultural land after the unit commences the commercial production

• All new units can avail tax related benefits with a maximum limit as defined below:

  • Non-priority sector:70% of the approved project cost

  • Priority sector: 100% of the approved project cost

• All new micro and small units will be given tax benefits by additional 30% of the approved project cost.

• All units engaged in generation of solar and/ or renewable energy for commercial purpose will be given tax benefits by additional 30% of the approved project cost.

• All new units will be entitled to avail 80% reimbursement against the admitted VAT/ CST/ Entry Tax deposited in the account of the State Government (excluding strictly any tax paid by them arising out of a purely trading business), for a period of 5 years from the date of commencement of commercial production. The VAT/Entry Tax/CST reimbursement shall be applicable only to the net tax payable, after adjustment of input tax credit against the output tax liability

• In case of a new unit established by a SC/ ST entrepreneur, she/ he will be entitled to avail 92% reimbursement against the admitted VAT/ CST/ Entry Tax deposited in the account of the State Government (strictly excluding any trading related taxes paid by them), with a maximum limit as defined below:

  • Non-priority sector:80.5% of the approved project cost

  • Priority sector: 115% of the approved project cost

• 50% reimbursement (in case of male workers) and 100% reimbursement (in case of female workers) of expenditure on account of contribution toward ESI and EPF scheme for a period of 5 years for new units for those employees who are domicile of Bihar. Maximum limit for reimbursement will be Rs. 1000/- per month for SC/ST and women employee and Rs. 500/- per month for general employee.

Not Applicable

Land Conversion Fees

• 100% exemption of "land conversion fees"/ "change in land use" fees being levied for conversion of agricultural land.