Special Credit Linked Capital Subsidy For Technology Enablement Of SC/ST MSMEs (SCLCSS)
Special Credit Linked Capital Subsidy For Technology Enablement Of SC/ST MSMEs (SCLCSS)
Ministry of Micro, Small and Medium Enterprises (MSME), Government of India has notified the revised guidelines of Special Credit Linked Capital Subsidy for Technology Enablement of SC/ST MSMEs through the introduction of Revised Guidelines of National SC & ST Hub scheme (NSSH). Under this Scheme, MSME facilitates purchasing of plant & machinery by providing upfront capital subsidy to the existing as well as new MSEs.
Objective of SCLCSS
The objective of this SCLCSS scheme is to promote new enterprises and support the existing enterprises in their expansion for enhanced participation in public procurement
Features of the SCLCSS scheme
The Scope of the Special Credit Linked Capital Subsidy for Technology Enablement of SC/ST MSMEs is as follows:
- The scheme will be applicable for SC/ST MSEs of manufacturing and service sectors
- The scheme would cover the purchase of new plant & machinery and equipment through term loan from Prime Lending Institutions (PLIs) for all manufacturing sectors and service sectors
- Subsidy for the SC-ST MSEs of the service sector shall be applicable from the date of issuance of the revised guidelines of NSSH
Subsidy to SC/ST MSEs under SCLCSS scheme
A special provision of 25% subsidy to SC/ST MSEs under National SC/ST Hub (NSSH) on institutional finance up to Rs.1 Cr. for procurement of Plant & Machinery (i.e. a subsidy cap of Rs.25 Lakhs) without any sector-specific restrictions on technology up-gradation has been incorporated in the revised guideline of SCLCSS to ease the access to the latest technology
The scheme would cover the purchase of new plant & machinery and equipment through term loans from Prime Lending Institutions (PLIs) for all manufacturing sectors and service sectors as brought out in the National Industrial Classification (NIC) code respectively on which banks/financial institutions are offering business loans, subject to consent/NOC from Pollution Control Board (wherever applicable)
Eligible Enterprises for SCLCSS
Sole Proprietorships, Partnerships, Co-operative societies, Private and Public limited companies owned by SC/ST Entrepreneurs of the MSE sector engaged in the manufacturing and service activities are eligible for seeking assistance under the Special Credit Linked Capital Subsidy for Technology Enablement of SC/ST MSMEs
Eligibility Criteria
The eligibility criteria to apply for the Special Credit Linked Capital Subsidy for Technology Enablement of SC/ST MSMEs are as follows:
- The MSME units should have a valid Udyam Registration for availing the subsidy under SCLCSS.
- SC/ST Units graduated from small scale to medium-scale are eligible for subsidy under SCLCSS for three years from the date of graduation.
- Industry graduating from small scale to medium-scale on account of sanction of the additional loan under this scheme shall be eligible for assistance
- Eligibility for capital subsidy under the Scheme is not linked to any re-finance Scheme of the Nodal Agency. Hence, the PLI doesn’t need to have to seek to refinance in respect of the term loans sanctioned by them from any of the refinancing Nodal Agencies.
- MSEs availing subsidy under this scheme shall be eligible for all other types of subsidy except any other Central Government subsidy for technology up-gradation
Non-Applicability
Industries covered under the RED category as per the Classification of industries for consent management (Schedule- VIII, rules 3(2) and 12 of Ministry of Environment & Forests, Govt. of India) shall not be eligible for subsidy under the above scheme
Fabricated and second-hand plants and machinery shall not be eligible for consideration for subsidy under this scheme.
MSME Announcement for SC/ST owned MSEs
SC/ST owned MSEs who have already availed subsidy under the existing CLCSS/ SCLCSS, before the date of notification of this scheme, may claim additional subsidy on account of the difference in the rate of subsidy for procurement of plant and machinery after issuance of notification in this regard, which is now permissible under this scheme. The overall limit on the subsidy shall be Rs. 25 lakh. Further, an Undertaking shall be obtained from the applicant SC-ST MSEs, duly signed by its Proprietor / Partner / Director regarding availment of subsidy under SCLCSS.
Calculation of Value of Plant & Machinery
Calculating the value of plant & machinery (manufacturing sector) and equipment (service sector) the following shall be excluded
- The cost of equipment such as tools, jigs, dies, molds, and spare parts for maintenance and the cost of consumable stores
- The cost of installation of plant & machinery and equipment
- The cost of purchase/ subscription/ installation of the licensed software and other related digital services
- The cost of research & development equipment and pollution control equipment (except, where they are approved for specific products /subsector by the Committee of Experts and firefighting equipment). e) The cost of generator sets, and extra transformer installed as per the regulations of the State Electricity Board (except where gas-based generator sets have been approved for specific products /sub-sector by the Committee of Experts.
- The bank charges /service charges paid to the State Small Industries Corporation, Gap Funding
- The cost involved in procurement or installation of cables, wiring, bus bars, electrical control panels (not those mounted on individual machines), oil circuit breakers, or miniature circuit breakers which are necessary to be used for providing electrical power to the plant & machinery or for safety measures.
- Transportation charges (excluding sales tax and excise) for indigenous machinery from the place of manufacturing to the site of the factory.
- Charges paid for technical know-how for the assembly of plant & machinery and equipment
- Import duty (excluding miscellaneous expenses as transportation from the port to the site of the factory, demurrage paid at the port). The shipping charges
- Custom clearance charges
- GST
- Cost of such storage tanks which store raw materials, finished products only and are not linked with the manufacturing process
- In the case of imported machinery, the following shall be included while calculating the value of plant & Machinery and equipment
Prescribed Date for applying Subsidy claim
Time Limit for applying for Subsidy Eligible claim with reference date (date of release of the last installment of term loan) of each quarter should reach up to the end of next quarter. For example, if the reference dates fall between 1st January 2022 to 31st March 2022 the claim should be forwarded latest by 30th June 2022.
Application Procedure for SCLCSS
The Nodal banks/ agencies notified from time to time by the Ministry of MSME will submit the application of SC-ST MSEs on the dedicated online software.
The nodal banks/ agencies would consider proposals only in respect of credit approved by their respective branches, whereas, for other Primary Lending Institutions (PLI), SIDBI and NABARD would be the nodal agencies for release of subsidy under this scheme.
Know more about the Submission of Subsidy Claim under the SCLCSS for Quarter-3 of FY 2021-22
Disbursement of Subsidy
Banks will follow the principle of First -In -First -Out (FIFO) while submitting the claims online under SCLCSS Scheme.
The principle of First -In -First -Out (FIFO) will also be followed by the NSSH Cell for disbursement of subsidy to the eligible beneficiary unit.
- The beneficiary unit will have to remain in commercial production/service for three years after installation & commissioning of the plant & machinery and equipment, on which subsidy under the SCLCSS has been availed.
- To ensure this, the subsidy released by the Government under SCLCSS will be kept in the form of a Term Deposit of an equivalent amount for three years with effect from the “reference date”.
On the expiry of the prescribed retention period of three years, Banks will liquidate the TDR and credit the proceeds into the loan account of the beneficiary after being satisfied that the requisite terms and conditions of SCLCSS including continuity of commercial production/service of the beneficiary unit are duly adhered to.
In the event of foreign currency Term Loans sanctioned by Banks/ PLIs, the relevant subsidies are to be retained by Banks in the shape of TDR in domestic currency.