Saturday, 22 November 2014
Friday, 21 November 2014
The subsidy benefits under TUFS for 12th plan
Complied By CA N A Basude
9422415078
The subsidy benefits under TUFS for 12th plan
would be as follows:
.
Weaving
(i) 6% IR and 15% capital subsidy on brand
new shuttleless looms or 30% Margin Money Subsidy (MMS) on brand new
shuttleless looms for powerloom sector;
(ii) 2% IR or 8% MMS on second hand imported
shuttleless looms with 10 years vintage and with a residual life of minimum 10
years;
(iii) For 30% MMS – capital ceiling caps of
RS. 5 crore and subsidy cap of Rs. 1.5 crore would be adhered to for
encouraging adequate investments by the MSME sector.
Processing
5% IR
and 10% capital subsidy for specified processing machinery. CETP/ETP will not
be considered for support under TUFS.
Garmenting
5% IR
and 10% capital subsidy on specified machinery for garmenting units.
Technical
Textiles (including non-wovens)
5% IR and 10% capital subsidy on specified
machinery required in manufacture on technical textiles.
Handloom
and silk sector
5% IR
or 30% capital subsidy on benchmarked machinery.
MSMEs
including jute sector
5% IR
or 15% MMS– subsidy ceiling to be Rs. 75 lakh.
i) Other segments – i.e.,
i) cotton ginning and pressing;
ii)
wool scouring;combing and carpet industry;
iii)
synthetic filament yarn texturising, crimping and twisting;
iv) viscose staple fibre and viscose filament
yarn;
v) knitting and fabric embroidery;
vi)
weaving preparatory machines;
vii) made-up manufacturing;
viii) CAD, CAM and design studio and
ix)
jute industry – 5%IR
Investments like factory buildings,
pre-operative expenses and margin money for working capital are eligible for
benefit of reimbursement under the scheme only for apparel and handloom sector
with 50% cap of total new eligible investment under RR-TUFS. Land is altogether
excluded from eligible investments under TUFS. This benefit, however, shall not
be available for textile units under the Scheme for Integrated Textile Park
(SITP).
Period of interest reimbursement – Interest
reimbursement will be for a period of 7 years including 2 years of moratorium /
implementation.
l) Eligibility of restructured / rescheduled
cases – subsidy in restructured cases will be restricted to the quantum
approved of subsidy as given in the initial loan repayment schedule.
Duration of the scheme –
The scheme in the R-TUFS form was extended
for the first year of the 12th Five Year Plan i.e. upto 31.3.2013. The proposed
parameters would be applicable from 01.04.2013. Term loans sanctioned during the
financial year 2012-13 would be eligible for subsidy as per parameters of
RTUFS. However, the subsidy caps as per the proposed norms would be applicable
on all subsidies dispensed on and are after 01.4.2013. In respect of the cases
pertaining to sectors where there is no change in admissible extent of subsidies
and are pending for issuance of UID due to non-availability of sectoral cap in
the previously extended scheme up to 31-03-2013, to be considered for issue of
UID under the continued TUFS scheme. However, cases pertaining to spinning,
weaving sectors etc where there are changes in subsidy pattern, would be
required to apply afresh as per revised terms and conditions under continued TUFS.
SCOPE OF THE SCHEME
TUFS benefit is available for TUFS
benchmarked machinery covering the following
activities:-
a. Cotton ginning and pressing.
b. Silk reeling and twisting.
c. Wool scouring, combing and carpet
industry.
d. Synthetic filament yarn texturising,
crimping and twisting.
e. Spinning.
f. Viscose Staple Fibre (VSF) and Viscose
Filament Yarn (VFY).
g. Weaving, knitting and fabric embroidery
h. Technical textiles including non-wovens.
i. Garment / design studio / made-up
manufacturing
j. Processing of fibres, yarns, fabrics,
garments and made-ups.
k. Production activities of Jute Industry.
ELIGIBILITY CRITERIA FOR
ASSISTANCE
1. DEFINITION OF TECHNOLOGY
UPGRADATION
Technology Upgradation would mean induction
of state-of-the-art or near-state-of-theart technology. But in the widely
varying mosaic of technology obtaining in the Indian textile industry, at least
a significant step up from the present technology level to a substantially
higher one for such trailing segments would be essential. Accordingly, technology
levels are benchmarked in terms of specified machinery for each sector of the
textile industry. Machinery with technology levels lower than that specified
will not be permitted for funding under the TUF Scheme.
2. ELIGIBLE MACHINERY
Installation of the following types of
machinery in a new unit or in an existing unit by way of replacement of
existing machinery and / or expansion will be eligible for coverage
under TUF scheme:
2.1 Cotton Ginning and Pressing Annex–
MC -1
2.2 Spinning/Silk Reeling & Twisting/ Annex –
MC -2
Synthetic
filament yarn Texturising, Crimping & Twisting
2.3 Wool scouring, combing and carpet
industry Annex – MC – 3
2.4 Manufacturing of viscose filament Annex -
MC - 4
yarn
and viscose staple fiber
2.5 Weaving / Knitting Annex -
MC - 5
2.6 Technical Textiles and non-woven Annex -
MC - 6
2.7 Garment / Made-up manufacturing Annex-
MC - 7
2.8 Processing of fiber / Yarn / Fabrics / Annex-
MC - 8
Garments
/ made-ups
2.9 Jute industry Annex -
MC - 9
2.10 Process control equipments for various
sectors Annex - MC - 10
2.11 Machinery eligible under 30% / 8% Margin
Money Annex- MC - 11
Subsidy (MMS-TUFS) for weaving/ power loom
sector
2.12 Machinery eligible under 10% capital
subsidy Annex - MC - 12
for processing sector.
2.13 Machinery eligible under 10% capital
subsidy Annex - MC - 13
for technical textiles including non-wovens.
2.14 Machinery eligible under 10% capital
subsidy Annex - MC - 14
for garment sector
2.15 Machinery eligible under 15% capital
subsidy Annex- MC - 15
for weaving / powerloom sector
2.16 Machinery eligible for CAD, CAM and
design studio Annex - MC - 16
Note: The lending agencies should ensure that
make and year of manufacture of all the above
eligible machinery are clearly indicated on
machine / name plate attached to machine.
GENERAL ELIGIBILITY
CONDITIONS
TYPE OF UNITS:
(1) Existing unit with or without expansion
and new units.
(2) New units must set up their entire
facilities only with the appropriate eligible technology.
(3) A
unit can undertake one or more activities listed at I.
SCOPE OF THE SCHEME
hereinbefore under the Scheme. Textile / Jute units with 100% foreign equity.
TYPE OF TEXTILE MACHINERY
ELIGIBLE:
(1) Under the TUF Scheme, only new machinery
will be permitted unless otherwise specified.
(2) However, the following imported second
hand machinery are also eligible under TUFS: Air jet, Projectile, Rapier and
Water jet shuttleless looms fitted with or without electronic jacquard /
electronic dobby and with or without high speed direct beam warper with creel
and/or sectional warping machine with auto stop and tension control of upto 10
years’ vintage and with a residual life of minimum 10 years. The value cap per
machine would be decided by Technical Advisory-cum-Monitoring Committee (TAMC).
(3) A certificate from a Chartered Engineer
of the exporting country certifying the vintage and residual life of the
imported second hand machinery duly countersigned by the Indian Embassy /
Consulate in the exporting country must be furnished to the lending agency at
the appropriate time as determined by the lending agency. Such a certificate is
compulsory for any import of eligible second hand machinery under this scheme
irrespective of the value of such import.
(4) Balancing equipment or equipment required
for de-bottlenecking the production process will also be eligible for funding
under RR-TUFS.
(5) Waste reduction equipment or devices will
be eligible for funding under the RR-TUFS.
(6) The size of the technologically upgraded
facilities of an existing unit or size of the new unit must be of a minimum
economic size (MES). MES for eligible segments of the industry should be any
unit which is financially viable as per viability analysis of the financial
institutions or banks. MES for stand-alone new spinning units will be 8000
spindles.
(7) Accessories / attachments / sample
machines / spares received along with the machinery upto the value of 20% of
the machinery cost eligible under RRTUFSor actual value whichever is lower will
be eligible.
(8) Investment in acquisition of technical
knowhow including expenses on training and payment of fees to foreign technicians.
(9) Machinery eligible for one segment is
eligible for other segments / activity also unless its eligibility is
specifically restricted for a particular segment.
(10) Eligibility of any other textile
machinery equal to or higher than the benchmarked technology not listed in the
annexures or developed in the course of the operation of RR-TUFS will be, suo
motto or on reference, specifically determined by the TAMC constituted by the
Government.
OTHER INVESTMENTS ELIGIBLE:
1) (i) The following investments for apparel
sector and handloom sector will also be eligible to the extent necessary for
the plant and equipment to be installed for Technology Upgradation and the
total of such investments will not normally exceed 50% of the total investment
in such plant and machinery (land is altogether excluded from eligible
investment under RRTUFS):
(a) factory building including renovation of
factory building;
(b) Preliminary and pre-operative expenses;
(c) Margin money required for working
capital, specifically required for the technology upgradation;
(ii) In case apparel / handloom unit is
engaged in other activity, the eligible investment under this head will only be
related to plant & machinery eligible for manufacturing of apparel /
handlooms.
2) Lending in excess of the limits prescribed
above in respect of the items included in subparas (1) of this para (i.e. para
3.3) shall attract the normal lending rates.
CUT-OFF DATE:
Only such loans as sanctioned by the lending
agencies on or after 01/04/2012 will be eligible to be considered for grant of
benefits under this scheme.
COVERAGE OF INVESTMENT
PRIOR TO SANCTION OF THE LOAN:
Advance / token payment up to the margin
money for machine cost can be paid by the unit prior to the date of sanction of
term loan. However, machines purchased on or after date of sanction of term
loan will be eligible under RR-TUFS subject to fulfillment of other terms and
conditions.
BENEFIT OF OTHER SCHEMES:
Textile / Jute units are permitted to avail
of benefits of other schemes, in addition to RR-TUFS, unless specifically
provided otherwise. In case of doubt, the matter may be referred to the Textile
Commissioner for clarification.
DETERMINATION OF ELIGIBLE
INVESTMENT UNDER CERTAIN CONDITIONS:
If a loan is not fully covered under TUFS,
i.e., it consists of both the TUFS and non-TUFS components, then disbursements
and repayments are required to be apportioned proportionately between the TUFS
and Non-TUFS components, for the purpose of working out interest reimbursements
payable.
SECTOR - SPECIFIC
ELIGIBILITY CONDITIONS:
COTTON GINNING AND
PRESSING:
a) Only composite (cotton ginning with
pressing) units will be eligible for coverage under the Scheme. However,
independent ginning or pressing units will be eligible to modernise under the
scheme provided they forward -integrate or backward - integrate with the
pressing and ginning facility respectively, of eligible technology level.
b) Only double roller gins or saw gins will
be eligible.
c) Baling Press Standards should be in
conformity with the amended BIS specifications.
d) A unit with existing 2-stage manual bale
pressing machine will not be compelled to replace it, while going for other
modernisation, as per TUFS.However, a unit replacing the bale pressing machine
or installing bale pressing machine for the first time will be required to
install only single stage automatic bale pressing machine.
SPINNING/SILK REELING &
TWISTING/WOOL SCOURING & COMBING
/ SYNTHETIC FILAMENT YARN
TEXTURISING, CRIMPING &TWISTING
a) Cotton ring spinning system:
(i) New stand alone / replacement /
modernization of spinning machinery will be eligible for 2% IR and spinning
units with forward integration with matching capacity in weaving / knitting /
processing / garmenting will be eligible for 5% IR. For qualifying for matching
capacity, linearity in value chain must be established. If matching capacity is
claimed in processing, it must include complete processing range and not just
yarn dyeing.
(ii) In the cotton ring spinning system, for
new units the MES will be 8000 spindles. For capacity expansion and
modernisation of the units there will be no MES.
(iii) In case of modernization of existing
obsolete spindleage through technology upgradation, replaced old and obsolete
spindles should ordinarily be scrapped and made completely unserviceable unless
their operations are established to be viable.
(iv) (a) The cotton ring spinning units are
permitted to install back-up facilities for de-bottlenecking, viz., cone
winding machine, cards,draw frame, speed frame, blow room etc. without increase
in the
spindleage, provided the unit is at or above
the MES level, viable and such investments brings up the unit to the desired
benchmark technology level as a whole.
(b) Auto doffer system for ring frame as a
retrofit is covered under the scheme which may be retrofitted / installed as a
new or existing frame irrespective of any make / manufacturer.
(v) Installation of compact spinning machine
for setting up of new capacity or for modernisation / replacement of existing
ring frames is permitted without any stipulation of MES. In situ upgradation of
existing ring frames by changing the existing drafting system to compact
spinning drafting system is also covered under RR-TUFS.
(vi) Post spinning / twisting of yarn
processing plant on stand alone basis to produce two fold twisted yarn or
singeing yarn without putting up yarn spinning unit are covered.
b) Open
end/Dref/Parafil/Selfil/Airjet spinning system:
These spinning systems being, by and large, specialized
yarn making systems, modernisation, capacity expansion or new units will be
permitted.
c) Worsted spinning system
:
(i) Technology upgradation of existing
capacity and expansion/new units with appropriate eligible technology will be
permitted.
(ii) Independent wool scouring and combing
units will also be eligible for funding under the TUFS.
d) Woollen/shoddy spinning
system:
(i) Woollen system of spinning includes
semi-worsted system of spinning.
(ii) Technology upgradation in existing units
and capacity expansion/new units in these sectors with appropriate eligible
technology will be permitted.
e) Silk reeling &
twisting:
(i) Technology upgradation in the existing
capacity and expansion/new units with appropriate eligible technology will be
permitted.
(ii) The replaced obsolete reeling/twisting
machinery should normally be dismantled unless their operations are established
to be viable.
f) Synthetic filament yarn
texturising, crimping and twisting:
Replacement of existing obsolete machinery,
capacity expansion or installation new units with appropriate eligible
technology will be permitted.
g) Carpet industry:
Technology upgradation of existing capacity
and expansion / new units with appropriate eligible technology will be
permitted.
VISCOSE FILAMENT YARN AND
VISCOSE STAPLE FIBRE:
Replacement of existing obsolete machinery,
capacity expansion or installation of new units with appropriate eligible
technology will be permitted.
WEAVING, KNITTING AND
NON-WOVEN / TECHNICAL TEXTILES/FABRIC EMBROIDERY MANUFACTURING UNITS :
6% IR and 15% capital subsidy (CS) is
available only for brand new shuttleless looms whereas second hand imported
shuttle-less looms of prescribed vintage shall be entitled for 2% IR.
I. Essential for non-woven
weaving units:
i) An appropriate configuration of looms and
machinery conforming to minimum economic size, if prescribed.
ii) In case of technology upgradation in an
existing unit, the replaced old and obsolete looms should ordinarily be
scrapped and made unserviceable unless their operations are established to be
viable.
II. Decentralised (MSME)
weaving sector:
1. In-situ upgradation of existing ordinary
looms/semi automatic looms/automatic looms to benchmark shuttle-less looms with
or without dobby/jacquard, is permitted to decentralized powerloom sector.
2. Replacement of an ordinary loom by a looms
of benchmarked technology features is permitted.
3. New units in the decentralized powerloom
sector are permitted to install shuttle-less looms with benchmarked technology features
under TUFS.
III. Handloom weaving:
1. Handloom sector is eligible for taking the
benefits of TUFS for all machinery listed in the GR on TUFS and permitted for
other sectors including powerloom and mill sector. In handloom sector only weaving
activity is different from powerloom and mill sector while other activities
particularly processing are same.
2. Handlooms with specified benchmark
features have been covered.
b) Essential for woollen
units :
i) An appropriate configuration of looms and
machinery conforming to minimum economic size, if prescribed.
ii) In-house weaving preparatory at least
matching with the weaving capacity (in the case of MSME units, weaving
preparatory is not essential).
iii) In case of technology upgradation in an
existing unit, the replaced old and obsolete looms should ordinarily be
scrapped and made unserviceable unless their operations are established to be
viable
c) Independent weaving
preparatory units :
An independent MSME / non-MSME (woollen or
non-woollen) weaving preparatory unit will install weaving preparatory
machinery as listed in Annex – MC -5.
d) Knitting units:
Replacement of existing obsolete machinery,
capacity expansion or installation of new units with appropriate technology is
permitted under TUFS
e) Technical textiles /
Non-wovens manufacturing units
(a) Machines required to manufacture
technical textiles and non-wovens, as listed in Annex – MC -6 are eligible for
coverage under TUFS.
(b) Since some of the machinery of technical
textiles are common the technical textile units intending to avail of 10%
capital subsidy will have to obtain a registration number from Office of the
Textile Commissioner prior to becoming eligible for 10 percent capital
subsidy.To obtain registration number technical textile units have to submit
the information in prescribed format TFR – I.
GARMENT / MADE-UP
MANUFACTURING :
a) Woven and / or knitted garment and/or
made-up manufacturing or combination thereof will be eligible.
b) Garment / made-up manufacturing and other
accessory equipments as required are to be installed out of the list in Annex –
MC -7.
DESIGN STUDIO:
Design studio set up by the textile,
readymade garment and jute industry with eligible machinery / equipments,
software and testing equipment is covered under TUFS.
PROCESSING OF FIBRE / YARN
/ FABRICS / GARMENTS / MADE-UPS
Processing machinery including essential
quality control equipments listed in Annex – MC - 8 for fibre / yarn / fabrics
/ garment / made-up processing and finishing will be eligible.
JUTE TEXTILES
a) Jute softening &
carding, drawing, spinning and weaving:
New machinery of eligible technology as
listed in Annex- MC -9 will be permitted.
b) Spinning and
weaving/knitting of jute blends:
(i) Eligibility conditions for units spinning
jute blends will be the same as for cotton spinning system detailed in para
4.2.
(ii) Eligibility conditions for units
weaving/knitting jute blended fabrics will be the same as for non-woollen
weaving and knitting as detailed in para 4.4.
c) Jute-blended
garment/made-up manufacturing :
Eligibility conditions for units
manufacturing jute-blended garments and/or madeups will be the same as for
non-jute garment/made-up manufacturing detailed in para 4.5.
d) Processing of jute
products
(i) Processing machinery as listed in Annex –
MC - 9 are eligible.
(ii) Quality control and pollution control
equipment eligible for TUFS funding will also be eligible as listed in Annex –
MC -9.
e) Processing of
jute-blended products:
Eligibility conditions will be the same as
for processing of non-jute textile products as detailed in para 4.7.
f) Material handling:
The machinery for material handling as listed
in Annex – MC-9 are essential for modernising jute units.
LOANS UNDER THE SCHEME
Under the Technology Upgradation Fund Scheme,
loans will be provided subject to terms and conditions given below:
a) Amount of loan :
The assistance will be need-based. There will
be no minimum or maximum limit for individual loans.
b) Promoter’s contribution
:
To be decided by the lending agency on the
basis of its existing norms.
c) Rate of Interest :
(i) Rupee loan :
Effective rate of interest to the concerned
borrower will be lower than the prevailing commercial rates of interest charged
by the lending agencies concerned; the Ministry of Textiles will reimburse the
5% (6% for brand new shuttleless looms) under the scheme to all segments except
spinning machinery of new stand alone / replacement / modernization of spinning
units, where the interest reimbursement will be limited to 2%. For Rupee loan
for installation of imported secondhand shuttleless loom interest reimbursement
will be 2%.
(ii) Foreign Currency Loan:
As applicable for normal Foreign Currency
loan. However, cover for exchange rate fluctuation not exceeding 5% (6% for
brand new shuttleless looms) per annum would be provided under the scheme. In
case of spinning machinery, the exchange rate fluctuation will be limited to 2%
for new stand alone / replacement / modernisation of spinning machinery. For
Foreign Currency loan for installation of imported secondhand shuttleless loom
interest reimbursement will be 2%.
(iii) Period of interest reimbursement :
(a) 1. Interest reimbursement will be
available for a period of 7 years including 2 years of implementation /
moratorium. The implementation and moratorium period can be more than two years
but interest reimbursement for implementation and moratorium period will be limited
to two years only. The implementation and moratorium period is considered from
the date of disbursement of first installment of loan under TUFS.
2. Quarter-wise interest reimbursement under
TUFS will be restricted to the quantum as per the loan repayment schedule of 7
years or actual, whichever is lower, submitted by lending agencies to the Office
of the Textile Commissioner for obtaining the unique ID number as per the procedure
in Para IV. The foreign exchange fluctuation / forward cover premium will also
follow the same system.
3. Subsidy due in a financial year under the
Scheme shall have to be claimed in the same financial year.
4. Banks are free to give loan for more than
7 years but subsidy will be given only for a period of 7 years including
implementation /moratorium period of maximum upto 2 years. (b) If an account
becomes a non-performing asset (NPA), the interest reimbursement would not be
available for that period. The interest reimbursement will be available from
the date of coming out of the NPA category. Quarter-wise interest reimbursement
under TUFS will be restricted to the quantum as per the loan repayment schedule
of 7 years or actual, whichever is lower, submitted by lending agencies to the
Office of the Textile Commissioner for obtaining the unique ID number as per
the procedure in Para IV.
Other conditions, viz.,
period of loan, security, conversion option, Debt-
Equity-Ratio etc.
Eligible units will be of minimum economic
size. Other conditions will be such as determined by the lending agency as per
its existing norms.
Financial norms of eligible
unit.
The units with a good track record, viable
and having positive net-worth are eligible.
Contingency provisions:
The contingency provision (non-firmed up
cost) to the extent of 5% maximum (on actual basis) may be covered under
RR-TUFS in respect of plant and machinery and other investments eligible under
RR-TUFS subject to a value cap of Rs.5 crore of eligible machinery.
Transferring the TUFS loan
from one bank / FI to another bank / FI as well as closing down one term loan
account under TUFS and availing of fresh term loan:
The outstanding principal amount under TUFS
loan account from one bank / FI can be transferred to another bank / FI subject
to the condition that portfolio (i.e., balance principal amount) remains
unchanged and the overall repayment period does not exceed 7 years. However,
this facility will be provided only once during the tenure of the loan. The
quarter-wise subsidy submitted by the original bank will however remain
unchanged. Instances of under selling of loan /component or any similar such arrangement
is not permitted.
Conversion of rupee term
loan into foreign currency loan and vice-versa:
Conversion of rupee term loan (RTL) into
foreign currency loan (FCL) and vice-versa on annual basis is permitted under
TUFS. The base rate of exchange will be the rate prevailing on the date of
conversion of rupee term loan into FCL. The tenure of the loan amount will
remain the same subject to the 7 years repayment period and avail ability of
foreign currency line of credit with the lending agency.
Coverage of forward premium:
The cost of forward cover premium for Foreign
Currency Loan under TUFS limited to 6%/5% / 2% per annum as the case may be on
the base rate of exchange as an option, which may be exercised only once in the
each financial year of the project is covered.
Coverage of lease finance:
Interest portion of the lease finance taken
by the manufacturers from Nodal Agencies/co-opted PLIs for eligible machinery
and equipments has been covered under TUFS. The coverage of lease finance will
be subject to normal leasing norms but lease period will be limited to 7years.
Coverage of machinery on
hire-purchase:
The Subsidy under the Hire -Purchase Scheme
are covered under RR- TUFS subject to the project promoted by Special Purpose
Vehicle (SPV) meeting the technology and other eligibility parameters laid down
under the Scheme. This scheme will be monitored / operationalised through
Office of the Textile Commissioner. A detailed operational guideline on
hire-purchase is at Annex – B.
Approval of nodal agency
for the loan sanctioned by co-opted PLI with their own prudential norms without
effecting the technology norms under TUFS:
The projects under TUFS which are sanctioned
by co-opted PLIs as per their own prudential norms and in compliance with the
technology norms of TUFS should be approved by Nodal Agencies.
Co-guarantee provided by
yarn supplier / master weaver:
Grant of TUFS loan to small scale powerloom
units on the strength of co-guarantee provided by the yarn supplier / master
weavers with sound financial position and ability to meet banking norms are to
be decided by FIs / banks. However, if in such cases term loans/finance was
provided by the FIs / banks, benefits under TUFS would be available as per
approved guidelines.
Deferred Payment Guarantee
(DPG) scheme - Operational Guidelines:
The DPG in respect of rupee loan only is
covered under TUFS. The operational guidelines are at Annex-C.
Coverage of ECB under
RR-TUFS
ECB availed of from overseas branch of an
Indian bank / foreign bank having Indian branch (being co-opted PLI) will be
eligible for RR-TUFS benefits prescribed for foreign currency loan under the
scheme, i.e., 2% / 5% / 6% cover as the case may be for exchange rate
fluctuation from the base rate or forward cover premium limited to 2% / 5% / 6%
per annum.
Margin Money Subsidy @ 30%
(brand new shuttleless looms) / 8% (secondhand imported shuttleless looms)
under TUFS (MMS@30% or 8%-TUFS) for Powerloom sector –Operational Guidelines:
MMS-TUFS@30% (brand
new shuttleless looms) or 8%(secondhand imported shuttleless looms)
for powerloom sector will be operationalised by Office of the Textile
Commissioner and detailed operational guidelines are at Annex –
D and the application form for claiming the subsidy is at FR-1.
Margin Money Subsidy @ 15%
under TUFS (MMS@15%-TUFS) for I MSME Jute & Textile sector –Operational
Guidelines:
MMS-TUFS@15% for MSME Jute & Textile
sector will be now operationalised by Office of the Textile Commissioner only
and detailed operational guidelines are at Annex – E and the
application form for claiming the subsidy is at FR -1.
Additional incentive in the
form of 10% capital subsidy for the processing machinery, garmenting machinery
and technical textile machinery and 15% capital subsidy for brand new
shuttleless looms under TUFS:The detailed operational guidelines are at Annex –
F and Annex – G respectively.
30% capital subsidy for the
handloom sector under TUFS:
1. An additional option has been provided to
Handloom Sector to avail of either 30% capital subsidy or the existing 5% interest
reimbursement under TUFS.
2. The detailed operational guidelines
including list of specified handloom machinery will be issued by the Office of
the Development Commissioner (Handlooms), New Delhi.
30% capital subsidy for the
silk sector under TUFS:
1. An additional option has been provided to
Silk Sector to avail of either 30% capital subsidy or the existing 5% interest
reimbursement under TUFS.
2. The detailed operational guidelines
including list of specified silk machinery will be issued by the Central Silk
Board, Bengaluru.
V.
IMPLEMENTATION/MONITORING/APPRAISAL MECHANISM
1. Stage I: Implementation
(i) There would be an online
pre-authorization system for each eligible application by the Textile
Commissioner, Mumbai. Applications would be processed on a first come first
served basis, subject to eligibility and availability of funds.
(ii) Request for UID shall be entertained
only upto one year from the date of sanction of term loan, except for
application permitted in para (iii) below.
(iii) For cases where the term loan has been
sanctioned during the financial year 2012-13,the lending agencies are allowed
to submit application for UID under RR-TUFS upto 31-03-2014 on the online
system of the Office of the Textile Commissioner.
(iv) For obtaining a Unique ID number, the
nodal banks / nodal agencies after determination of eligibility and admissible
amount under TUFS for each case decide the eligibility and allot ECN
(Eligibility Certificate Number) for each case and thereafter submit information
online in the prescribed format to the Textile Commissioner, Mumbai,. The
co-opted PLIs of Nodal Agencies will submit information online in the
prescribed format to the Textile Commissioner, Mumbai after obtaining ECN from
their concerned Nodal Agencies. The format for applying for unique ID number is
at FR-2. The lending agencies are required to furnish quarter-wise
subsidy requirement for entire period of 7 years or actual period whichever is
lower. Quarter-wise interest reimbursement / capital subsidy will be restricted
to the quantum as submitted in this format to the Office of the Textile Commissioner.
Quarter-wise interest reimbursement / capital subsidy can be lower than the
amount given in this format but cannot be higher than this amount.
(v) If the UID applications are found in
order in all respect, the same will be processed for allotment of UID and the
Textiles Commissioner Mumbai will issue a Unique ID number to pre-authorize the
loan application for submission of subsidy claim by the lending agency in the
online system. The correctness of the information submitted for UID will be the
responsibility of the Lending Agency concerned.
(vi) If there is any apparent discrepancy,
the UID application will be referred back to the concerned Lending Agency for
rectification and re-submission. The re-submitted application will be
considered again on first-come-first-served basis.
(vii) Mere creation/submission of UID
application in the online system will not entitle for UID Number and for
subsidy under TUFS.
(viii) Any application sanctioned by the Bank
without the Unique ID number by the Textiles Commissioner, Mumbai would not be
eligible for release of subsidies under the TUFS scheme.
(ix) The Textiles Commissioner will stop
preauthorization as soon as the available subsidy cap is reached in the
segment, as mentioned in Para 6(i).
(x) In order to ensure data integrity and
prevent any possible misuse of the scheme, the data furnished by lending
agencies through FR-2 over web portal of Textile Commissioner shall be treated
as frozen and subsidy payments shall be considered strictly as per the frozen
data.Lending agencies, therefore, shall be well advised to be doubly careful
while furnishing the details in application for UID as the experience of
previous operation of the scheme had brought out several lapses which
ultimately jeopardize the borrowers. As a safeguard, for any mistakes still
cropping in, the genuine cases of deviations in data submitted by lending
agencies would be entertained by the Textile Commissioner only if recommended
by CMD of the lending agencies and counter recommended by the Dept. of
Financial Services, Ministry of Finance within the overall figures of committed
liabilities with approval of IMSC.
2. Stage II: Monitoring
Process
(i) The TAMC will monitor and review the
progress of the scheme and apprise the Ministry and IMSC periodically.
(ii) The IMSC under the Chairmanship of
Minister of Textiles would review the scheme and ensure compliance of the
subsidy cap.
ANNEX – MC11
LIST OF MACHINERY ELIGIBLE
UNDER MMS@30%/8%-TUFS
a. Main machinery.
S. No. Type of Machinery
1. Pirn Changing Automatic Loom
2. Shuttle- less Looms*
3. Dobby
4. Jacquard
5. Pirn Winding
6. Sectional Warping Machine
7. Warping Machine
8. Sizing Machine
9. Two for one twister (TFO)
10. Prewinder / rewinder
* Specifications for brand new Rapier Loom,
Projectile Loom, Airjet looms and Waterjet Looms are given below:
S.No Type of loom
Specifications
1. Rapier Loom Weft insertion rate not less than 650
mtrs. per minute with or
without electronic dobby /
electronic jacquard
2
Projectile Loom
Weft insertion rate not less than 750 mtrs. per minute with
or
without electronic dobby /
electronic jacquard
3
Airjet Loom
Weft
insertion rate not less than 1200 mtrs. per minute
without electronic dobby /
electronic jacquard
Weft insertion rate not less
than 900 mtrs. per minute
with electronic dobby /
electronic jacquard
4
Waterjet loom Weft insertion rate not less than 1000 mtrs.
per minute
without electronic dobby /
electronic jacquard
Weft insertion rate not less than
800 mtrs. per minute
with
electronic dobby / electronic jacquard
b. List of accessories of
automatic pirn changing loom, 190 cms width
Sr. No. Accessories
Price (Rs.)
1 Warp Beam (1) 6000.00
2 Cloth Roller (1) 1000.00
3 Motor (1)
10000.00
4 Heald Frame (6 Nos. fortappet and 16 for
dobby)12900.00 (for tappet)34400.00 (for dobby)
5 Heald Wires (8000) 6666.00
6 Drop Pins (6000) 5000.00
7 Shuttle (1 No.) 1500.00
c. List of accessories of
shuttleless rapier loom, 190 cms width
Sr. No. Accessories Price (Rs.)
1 Warp Beam (1)
6000.00
2 Cloth Roller (1) 1000.00
3 Heald Frame (6 Nos. For tappet and 16 for dobby) 12900.00
(for tappet) 34400.00 (for dobby)
4 Heald Wires (8000) 6666.00
5 Drop Pins (6000) 5000.00
d. Other equipments
New Humidification Plant/ Air Compressor/
De-mineral Plant or Reverse Osmosis Plant,beam gaiting and knotting machine are
also eligible subject to a maximum of 10% of the total cost of the eligible
machinery for a project. However, subsidy for a project under the scheme will
be restricted to Rs.60 lakh / Rs.1 crore whichever is applicable.
ANNEX – MC 12
LIST OF PROCESSING
MACHINERY ELIGIBLE UNDER TUF SCHEME FOR
10% CAPITAL SUBSIDY AND 5%
INTEREST REIMBURSEMENT
1) Automatic Dye Weighing and Dispensing
System.
2) Process house and dye Kitchen management
system for whole process house.
3) PLC controlled Shearing / Cropping
machine.
4) PLC based yarn / fabric Singeing machine
with auto mixing of air & fuel for temperature and flame control with or
without pre and post brushing and desizing unit.
5) Singeing machine for tubular fabrics
6) Knit tubular mercerizing machine or
bleaching cum mercerising machine.
7) Ammonia mercerising machine for fabrics,
including ammonia recovery plant
8) Fully automatic Yarn / fabric mercerizing
machine with Caustic Recovery Unit (without caustic recovery unit if unit
already has it)
9) Knit fabric continuous bleaching plant
10) Baloon Padder
11) Slit opener with open width squeeze
mangle for knitted fabric.
12) Open-width continuous scouring and
bleaching range with microprocessor attachments and automatic chemical dosing.
13) Soft package precision winding machine
14) Arm hank dyeing machine
15) Automatic cabinet type yarn dyeing
machine
16) PLC based Package Dyeing machines
(cheese, cone.Tops, fibres, dyesprings, yarn beam)
17) PLC controlled Fully Automatic Flat Bed
Printing machine with pneumatic blanket control
18) PLC based Soft flow Dyeing Machine
19) PLC based Rapid Jet Dyeing Machines
20) PLC based Fully Automatic Jigger with
Servo / Microprocessor control
21) Compact continuous dyeing and finishing
machine for tapes / narrow width woven fabric
22) Open width Pad-dry and / or Pad-Steam
continuous dyeing range with micro processor based energy control and water
monitoring
23) Indigo dyeing range
24) Industrial washing / drying machine for
garments / made ups/Industrial tumble dryers/Washers.
25) Digital / laser / len engraving / screen
making system for rotary screens
26) PLC based fully Automatic Rotary Screen
Printing Machine with magnetic / Air flow squeegee system, automatic design
setting, and quick change over facility/ flying design change (FDC) system with
or without on-line washing arrangement
27) Ink jet printing machines (For textile
processing units only).
28) High Speed Micro inkjet engraver with UV
exposing unit.
29) Continuous transfer printing machine
(cylinder based) for synthetics.
30) Thermosoling range (For Synthetics only).
31) PLC based continuous crabbing machine.
32) PLC based scouring and milling machine.
33) Loop ager with arrangement for moist and
superheated steaming.
34) Powder dot coating / laminating machine
for fabrics.
35) Continuous weight reduction machine
through micro wave technique (for Polyester goods only)
36) Multichamber Washing range with minimum 5
chambers
37) Multi cylinder drying range with
individual cylinder drives with or without padding mangle
38) Multi chamber stenter (minimum 4
chambers) with arrangement of Thermic fluid /gas heating.
39) Compressive Shrinking range
40) PLC based continuous decatising machine.
41) Airo Machine (for durable mechanical
finishes)
42) Weft Straightner with electronic controls
43) PLC controlled Calendering Machine having
Racolan sleeve
44) PLC based Compacting machine
45) Relax / Radio frequency / Radiant gas
fired / Loop dryers
46) Sand blast machine for denims
47) Machine for Softening/Stone wash effect
on fabric/garments.
48) Robotised automatic roll packing machine.
49) Plasma Treatment machines
50) Continuous Pressing and Setting Machine /
Super finish machine
51) AC invertor driven PLC based Fabric
inspection machine with fault analyzer and report generator
52) Hand held spectrophotometer for shop
floor colour matching
53) PLC based oil / gas fired boiler (Steam
/Thermic fluid) with automatic control on combustion efficiency
54) Reverse Osmosis, Nano Filteration,
Multiple effect / stage Evaporators / Mechanical Evaporator.
55) On line/Off line Chemical concentration
indicator & controlling system for textile processing machines.
57) Fabric Profile System to monitor and
control the speed of stenter machine while heat75 setting/drying/finishing for
process and quality improvement.
58) Fabric Centering & Spreading system.
59) Automatic Fabric Straitening system for
high speed ranges.
60) Monitoring System for Weight/Denier
reduction process.
61) On line monitoring system for treated liquid
effluent quality and quantity.
62) Stack monitoring system for energy
conservation and emission quality.
63) Testing equipments in Quality Control Lab
accredited by National Accreditation Board for Lab (NABL) India and set up in
the textile & jute unit.
64) Wool Carbonising Line / Plant.
65) Automated Warehouse system for textile
products.
ANNEX – MC15
LIST OF BRAND NEW
SHUTTLELESS LOOMS ELIGIBLE FOR 15% CAPITAL SUBSIDY AND 6% INTEREST
REIMBURSEMENT UNDER TUFS
a. Eligible brand new
shuttleless looms
Sr. No. Description of the
brand new shuttleless looms
1 Projectile looms
2 Airjet looms
3 Waterjet looms
4 Rapier looms
Specifications for brand new Rapier Loom,
Projectile Loom, Airjet looms and Waterjet Looms are given below:
S.No Type of loom Specifications
1. Rapier Loom Weft insertion rate
not less than 650 mtrs. per minute with or without electronic dobby / electronic
jacquard
2 Projectile Loom Weft insertion rate not less than 750 mtrs. per
minute with or
without electronic dobby /
electronic jacquard
3 Airjet Loom Weft insertion rate not less than 1200
mtrs. per minute
without electronic dobby /
electronic jacquard
Weft insertion rate not less than 900
mtrs. per minute
with electronic dobby /
electronic jacquard
4 Waterjet loom Weft insertion rate not less than 1000 mtrs.
per minute
without electronic dobby / electronic jacquard
Weft insertion rate not
less than 800 mtrs. per minute
with electronic dobby / electronic jacquard
ANNEX – B
OPERATIONAL GUIDELINES FOR
PILOT PROJECT ON TECHNOLOGY
UPGRADATION OF POWERLOOM
SECTOR ( HIRE-PURCHASE)
1. The Hire Purchase Scheme in which risk and
rewards incidental to the ownership of the asset is transferred to purchaser
but not the actual ownership until end of the period. As per the theme of the
scheme, the hirer (SPV) would procure the machines and then provide them on
hire-purchase basis to the weavers. Ultimate ownership will transfer only at
the end of the term of hire-purchase. The operational guidelines of the
Hirepurchase scheme under RR-TUFS are as follows:
2. Duration of the scheme
2.1 The operation of Hire-purchase scheme
under RR-TUFS will be implemented from the date of the resolution to 31st
March, 2017.
3. Eligible Project
3.1. The scheme is applicable to the projects
of powerlooms units promoted by Special Purpose Vehicle (SPV) meeting the
technology and other eligibility parameters laid down under the Scheme.
4. Quantum of subsidy
4.1 30% Subsidy on machinery under RR-TUFS.
4.2 3% additional upfront credit risk cover
where the beneficiary provides at least 50% collateral security to the SPV.
Else this 3% benefit will be passed on to the SPV, where no collateral security
is offered, to create a debt security pool
4.3 2% Extra costs towards additional
interest and administrative expenses to enable the SPV to meet initial loading
of instalments due to extended tenure of Hire-Purchase i.e.10 years than the
loan repayment period of 7 years.
5. Eligible machinery
5.1. It would cover installation of new
indigenous or imported Shuttleless looms only; with or without dobby or
jacquard, accessories for loom and preparatory machines. Preweaving Machinery
such as warping, sizing, Two for One Twister, Three for One Twister attached to
weaving unit etc.
5.2 The New Humidification Plant/ Air
Compressor/ De-mineral Plant or Reverse Osmosis plant, Beam Gaiting and
Knotting Machine are also eligible subject to a maximum of 25% of the total
cost of the eligible machinery..
6. Minium Size of Project
6.1. Minimum economic size of project to be
sanctioned under this scheme is proposed at 48 looms. This group of 48 looms
will be further divided in a minimum economic size of
4 looms per weaver. This size is defined on
the basis of capacity of each weaver to handle 4 looms efficiently. Thus the
project cost will be divided in 12 equal parts. The shuttleless looms installed
in the project would be available to powerloom weavers on hire-purchase for a
period not more than 10 years along with proportionate shed area.
7. Lending Agency
7.1. NBFCs registered with RBIs as category A
and B, all banks including cooperative banks / SFCs /SIDCs and SIDBI are
eligible for funding under the scheme.
8. Financial norms
8.1. Financial norms like security
debt-equity ratio, previous years profit position, networth etc. will be as per
existing norms of lending agency. However, they should not be stricter than TUF
norms.
8.2. Projects availing subsidy should at
least function for a minimum period of 10 years under the scheme
9. Role of SPV
9.1. It is suggested that a model where hirer
(SPV) – Purchaser coordinated approach can bring feasibility and workability to
the scheme. Here the hirer (SPV) is envisaged to be an SPV led by a group of
weavers or a strong anchor that could be a large textile manufacturer or a
cooperative acting as master weaver or any entrepreneur where the purchaser
would also have a small equity stake. It is envisaged to promote SPVs bringing out
equity capital and giving high-tech looms to small weavers on hire-purchase
basis with enhanced benefits on looms, common facility centres and
infrastructure.The project will be implemented through a special purpose
vehicle duly registered under the Companies Act, 1956 as private limited /
limited company as the case may be to implement the project. The SPV can be
promoted by a group of weavers, the machine manufacturers, master weavers,
corporate houses, financing companies etc. The responsibilities of SPV would
include identification of user/member beneficiaries, identification of land,
project preparation and submission to the Government for approval, managing the
required bank finance on the credential of potential promoters/investors;
dovetail other schemes viz. SITP, TUFS etc to get infrastructural and building
incentives and subsidy on machinery respectively, execution of the project and
its management. SPV should ensure the availability of working capital in cases,
where powerlooms are not functioning on job work basis. The SPV will work as
catalyst for fund generation and repayment.SPV would ensure that the benefits
under this Scheme should reach the weavers in a closed/ controlled environment
like SITP, Mega clusters Scheme.SPV will generate funds by collecting
maintenance charges from members and operating common facility such as
Pre-Weaving activity. The infrastructure and building would remain with the
hirer (SPV) till completion of the hire-purchase agreement and/or may be
transferred to the weavers/ individual rent holders subject to settlement of
hirepurchase costs. SPV may act as a facilitator to bring job work and
marketing of the product. The SPV will be responsible for maintaining the
infrastructure and factory
building on chargeable basis from the
purchaser. Common facilities like Preparatory,Humidification plant, Compressor,
Electricity etc. can be owned by the SPV itself and the cost can be covered
under hire- purchase installments. It was also felt that the individual small
weaver may not be in a position to enter direct marketing and therefore it is
suggested that the SPV/Large Corporate/Master Weaver may supply weaver’s beams
to the weavers and get it converted into fabrics by paying job charges (pick
rate) and take back the fabrics for further processing in upward value chain
and final sale. At the end of the hire- purchase period, the ownership of the
looms along with the building will be transferred to the weavers. This model
with 10 years instalment period could be viable and work for long.
10. Safeguard against
Mis-utilisation
10.1. Indigenous loom should bear machinery
details like serial number of the machine, Model and Year of Make which should
be visible, by way of casted / engraved/tamper proof name plate as the case may
be, on the machines. Imported machine shall have serial number, model and year
of make.
10.2 Weaver-beneficiary will be identified on
the basis of available documents such as Powerloom permit, Information
Memorandum filed to District Industries Centre,Acknowledgement issued by
Textile Commissioner etc. In case of new weavers,training/skill development
certificates may be insisted.
10.3 Shuttleless looms installed in the
project would be hired out as maximum of 4 looms per powerloom
weaver/entrepreneur on hire-purchase basis to avoid cornering major share by
any single entrepreneur.
10.4 In case of default by SPV care can be
taken by use of Escrow Account for deposit of hire-purchase rentals by the
purchaser. Further action can be taken against the defaulting members
separately as separate records will be available. Legal action against SPV will
be easier to financial institutions as the ownership of assets will rest in the
hands of SPV only and lease agreements would be accepted only in the format
where the machines can be acquired by financial institution from SPV directly
without intervention of defaulting weavers.
10.5 The Textile Commissioner will monitor
the progress of the scheme.
11. Monitoring/
Implementation of the scheme
11.1 The appraisal would involve office of
the Textile Commissioner conducting inspection of the unit through Joint
Inspection Team (JIT) to verify the progress of the project, installation/
commissioning of machinery and sending the JIT report along with all the
related documents to the Powerloom Development Cell, Office of the Textile
Commissioner, Mumbai. This cell would then scrutinize/ examine the JIT report
and release the subsidy to the eligible units through its escrow bank account after
successful installation and commissioning of machinery under the project.
11.2 The indigenous manufacturers supplying
the machines under the scheme have to register with the office of the Textile
Commissioner. The standard of looms necessary for registration shall be
prescribed by the Office of the Textile Commissioner time to time.
11.3 The Textile Commissioner will monitor
the progress of the scheme.
11.4 The hire-purchase agreement can be
framed in multiple manners by each party depending upon state laws but
ultimately it should contain the following clauses as stipulated:
(i) The risk attached with running of
machines will be on the purchaser and he will be entitled to benefits arising
from running of the same.
(ii) The ownership of machine will be
transferred at the end of the hire-purchase term to the purchaser. Until then,
the purchaser will have only user rights attached to the same and SPV will
remain owner of the assets.
(iii) The machine will be subject to the
charge created on the same by the financial institutions/ SPV for providing
finance for the machine. No permissions will be required to be taken from
purchaser in case a default is conducted by him in repayment of the finance
amount.
(iv) The purchaser will be depositing the
hire-purchase charges to the ESCROW account opened for the purpose.
ANNEX –
D
OPERATIONAL GUIDELINES FOR
IMPLEMENTING 30% MMS UNDER TUFS (MMS@30%-TUFS) FOR BRAND NEW SHUTTLELESS LOOMS
AND 8% MMS (MMS@8%-TUFS) FOR SECOND HAND IMPORTED SHUTTLELESS LOOMS FOR
POWERLOOM SECTOR
1. An option has been provided to the
powerloom units to avail of 30% Margin Money Subsidy under TUFS (MMS@30%-TUFS)
for brand new shuttleless looms in lieu of 6% interest reimbursement and 15%
capital subsidy / 15% Margin Money Subsidy and 2% IR or 8% MMS (MMS@8%-TUFS) on
second hand imported shuttleless looms. The operational guidelines are as
follows:
2. Duration of the scheme
The operation of this scheme will be co-terminus
with RR-TUFS.
3. Eligible units
3.1. The scheme is applicable to MSME
powerloom units i.e., the units having investment in plant & machinery as
per Micro, Small & Medium enterprises development Act 2006. However, filing
of Entrepreneurs Memorandum with concerned District Industries Centre is a pre-requisite
for availing of assistance under the scheme.
3.2 The eligibility of the powerloom unit is
subject to a capital ceiling of Rs. 500 lakh and ceiling on margin money
subsidy of Rs. 150 lakh for brand new shuttleless. Powerloom units exceeding
capital ceiling of Rs. 500 lakh would not be eligible for assistance under 30%
MMS-TUFS / 8% MMS-TUFS. Such units are advised to avail of 6% / 2% interest
reimbursement under TUFS respectively.
3.3 UID from Office of the Textile
Commissioner is compulsory under this scheme. After obtaining UID, unit/Bank
has to submit claim application for subsidy through office of the Textile
Commissioner as per the procedure under this scheme.
4. Quantum of subsidy
4.1 30% margin money subsidy will be
available on investment in TUF compatible specified machinery subject to a
ceiling of Rs.1.5 crore on subsidy amount to each unit.
4.2. Powerloom units availing of 30% MMS / 8%
MMS would not be eligible under the NEF scheme.
5. Eligible machinery
5.1. The eligible machinery for 30% MMS-TUFS
include brand new shuttle less looms.
5.2 The eligible machinery for 8% MMS-TUFS
include second hand imported shuttle less with 10 year vintage and with a
residual life of minimum 10 years.
6. Bench marking of price
under the scheme:
The indigenous machinery manufacturers shall
be benchmarked. A list of eligible machinery manufacturers is at Appendix-I.
7. Lending Agency
NBFCs registered with RBIs as category A and
B, all banks including cooperative banks / SFCs /SIDCs and SIDBI are eligible
for funding under the scheme.
8. Financial norms
8.1. Promoters contribution of 15% is to be
ensured by the lending agency.
8.2. Financial norms like security
debt-equity ratio, previous years profit position, networth etc. will be as per
existing norms of lending agency. However, they should not be stricter than TUF
norms.
8.3. Powerloom unit availing of 30% MMS / 8%
MMS should at least function for a minimum lock-in period of three years under
the same ownership from the date of disbursement of subsidy to ensure that
repayment period including moratorium period for the term loan should be
minimum of three years.
9. Release of subsidy
Following mechanism will be adopted for the
release of subsidy to Machinery Manufacturers/ Entrepreneurs/ Banks.
9.1. Machinery Manufacturers
9.1.1 The powerloom unit will approach the
lending agency for a term loan with their project proposal. The lending agency
would advise the office of the Textile Commissioner of the sanction of the loan
in the prescribed format as at Appendix-II.
9.1.2 The MSME entrepreneur would submit
application for claim to Office of the Textile Commissioner in the prescribed
format as at FR 1.
9.1.3. The powerloom entrepreneur would
release his initial advance of minimum 15% contribution directly to the
machinery manufacturer for the cost of the machine. The lending agency would
release the loan to the machinery manufacturer when machinery is ready for
dispatch. In case, with the loan amount, 70% of the cost of the machinery is
not met, the powerloom weaver would make good the remaining amount to the
machinery manufacturer from his own resources.
9.1.4. The machinery manufacturer/powerloom
entrepreneur would install and commission the loom on receiving 70% of the cost
of the machinery. After satisfactory commissioning of the loom, the machinery
manufacturer would inform the office of the Textile Commissioner.
9.1.5. In case of imported machinery, the
powerloom weaver would inform the office of the Textile Commissioner after
commissioning of the looms.
9.1.6. Textile Commissioner would constitute
inspection teams on regional basis to inspect and certify the commissioning of
the machinery. It would be ensured that Certification Committee issues a
certificate within 15 days from date of intimation by the machinery
manufacturer.
9.1.7. The 30% subsidy / 8% subsidy would be
released by the office of the Textile Commissioner to the machinery
manufacturers/ units Bank Account after receipt and examination of
certification from the inspection team.
9.1.8. In respect of TUFS compatible imported
looms and machinery, the powerloom weavers will need to open a LC in Bank to
make the purchase. In such cases, the 30% subsidy / 8% subsidy would be
released directly to the powerloom weaver’s bank account after receiving
installation and commissioning report of the imported looms and machinery.
9.1.9. Interest subsidy/capital
subsidy/Margin Money subsidy on the basic value of the machineries and exclude
the tax component/custom duty for the purpose of valuation.
9.1.10. In case powerloom entrepreneur avails
of bridge finance from the lending agency for the 30% / 8% MMS to be given, the
30% / 8% subsidy would be released by the Textile Commissioner directly to the lending
agency.
9.1.11. The subsidy will be released subject
to Stage I of monitoring process of Para IV relating to Implementation /
Monitoring / Appraisal mechanism.
9.2. Banks
9.2.1. The Powerloom units may avail of 30%
MMS / 8% MMS on ‘front ended’ basis along with bank finance. The
operational guidelines for releasing of 30% / 8% subsidy are as follows:
9.2.2. The powerloom unit will approach the
lending agency for term loan and bridge finance for 30% / 8% MMS with their
project proposal. After sanctioning of the loan the lending agency shall advise
the O/o the Textile Commissioner the sanction of the loan in the prescribed
format at Appendix - III.
9.2.3. Under the scheme, the lock in period
for term loan would at-least is of 3 years.
9.2.4. The powerloom entrepreneur would
release his initial contribution of minimum of 15% directly to the machinery
manufacturer.
9.2.5. The lending agency would release the
term loan as well as bridge finance to the machinery manufacturers when
machinery is ready for dispatch.
9.2.6. The machinery manufacturer would
continue with casting / engraving of the ninedigit identification code for each
machinery.
9.2.7. The machinery manufacturer/ powerloom
entrepreneur would install and commission the machinery and inform the lending
agency about commissioning of the machinery.
9.2.8. Lending agencies visits the unit
either before or after disbursement of the loan.During this visit, the lending
agency would ensure the casting/engraving of the nine-digit identification code
on the indigenous machinery as per the guidelines.
9.2.9. After this visit, the lending agency
will inform the O/o the Textile Commissioner that the party has installed the
machinery and they have released the payment including the bridge finance on
account of the 30% margin money subsidy in the prescribed
format. The lending agency, along with this declaration will also send the
copies of all related documents, which should invariably
have all the specification of the machinery and also the 9-digit
identification code to the office
of the Textile Commissioner.
9.2.10. Based on the documents so received
from the lending agency, the O/o the Textile Commissioner would release
the margin money subsidy to the lending agency.
9.2.11. 30% / 8% margin money subsidy will be
worked out on the basis of invoice price exclusive of all taxes, in respect of
indigenous machinery. The lending agency should provide bridge finance to the
extent of 30% / 8% of eligible investment.
9.2.12. In respect of brand new / second hand
imported machinery, the 30% / 8% margin money subsidy will be worked out on the
basis of CIF price.
9.2.13. In case the lending agencies give
bridge finance more than the eligible 30% / 8% margin money subsidy, the excess
amount will have to be recovered from the powerloom weaver or it can be
converted into a normal term loan by the lending agency.
9.2.14. Advance / token payment of the
machine cost can be paid by the unit prior to the date of sanction of term
loan. However, machines purchased on or after date of sanction of term loan
will be eligible under TUFS subject to fulfillment of other terms and
conditions.
9.2.15. Textile Commissioner would constitute
a team comprising of senior officers of the Head office to periodically inspect
on random basis the machinery installed/commissioned as well as the original
record of the bank pertaining to the loan to the beneficiary.
10. Safeguard against
mis-utilisation
10.1. To prevent mis-utilisation of the
scheme, casting of a unique mill no, machine code no, and engraving of the
running serial number would be done on each machine.There would be a nine-digit
identification code for each machinery. The nine-digit identification code will
include the following:
• The first three digits (000) of the
identification code will indicate unique three digit mill No. for each
manufacturer which has been allotted by the Textile Commissioner. The unique
three digit mill no. will be casted in the specified cast components by the
machinery manufacturers.
• The next two digits (00) of the
identification code will indicate the type of the machinery. The two digit
number for different type of machinery has been specified by the Textile
Commissioner. The details of the two digit numbers are given in the
ANNEX– E
OPERATIONAL GUIDELINES OF
MARGIN MONEY SUBSIDY @ 15% UNDER
TUFS FOR SMALL SCALE
TEXTILE AND JUTE UNITS
1. An option has been provided to the small
scale textile and jute units to avail of 15% Margin Money Subsidy under TUFS
(MMS@15%-TUFS) in lieu of 5% IR. The operational guidelines of the MMS@15%-TUFS
are as follows:
Duration of the scheme
2. The operation of MMS@15%-TUFS will be
co-terminus with RR-TUFS.
Eligible units
3. The scheme is applicable to MSME of
eligible segments mentioned in I. SCOPE OF THE SCHEME in GR of TUFS. The
definition of MSME would be as per Micro, Small & Medium Enterprises
Development Act 2006. However, filing of Entrepreneurs Memorandum with
concerned DIC Centre is a pre requisite for availing of assistance under 15%
MMS.
4. The eligibility of the MSME is subject to
a capital ceiling of Rs. 500 lakh and ceiling on margin money subsidy of Rs.75
lakh. MSME exceeding capital ceiling of Rs. 500 lakh would not be eligible for
assistance under 15% MMS – TUFS. Such units are advised to avail of 5% interest
reimbursement under TUFS.
5. UID from Office of the Textile
Commissioner is compulsory under this scheme. After obtaining UID, unit/Bank
has to submit claim application for subsidy through office of the Textile
Commissioner as per the procedure under this scheme.
Quantum of subsidy
6. 15% margin money subsidy will be available
on investment in TUF compatible machinery subject to a ceiling of Rs. 75 lakh
on subsidy amount.
7. MSME availing of 15% subsidy will not be
eligible for 10% / 15 % capital subsidy in specified processing, garmenting,
brand new shuttleless looms and technical textile machinery.
8. Unit after availing assistance under 5%
Interest Reimbursement cannot avail assistance under MMS@15%-TUFS. They may
however continue to get assistance under 5% Interest Reimbursement.
Norms and eligible
machinery
9. Technology and other norms of TUFS are
equally applicable to MMS@15%-TUFS cases for determining the eligibility under
the scheme.
10. The eligible machinery under MMS@15%-TUFS
are at Annex – MC 1, MC 3 to MC 10 and MC 16 of GR of TUFS.
11. Make and year of manufacture should be
clearly indicated on machine / name plate attached to the machine.
Eligible value for subsidy
12. The margin money subsidy will be worked
out on the basic value of the machinery excluding the tax component for the
purpose of valuation. In other words, for indigenous machinery the basic price
and for imported machinery CIF price would be considered for working out
subsidy.
Lending Agency
13. All Nodal Banks, IDBI Bank, SIDBI and its
all co-opted PLIs are eligible for funding under the scheme.
Financial norms
14. The promoter’s contribution of 15% is to
be ensured by the lending agency.
15. Financial norms like security debt-equity
ratio, previous years profit position, networth etc. will be as per existing
norms of lending agency. However, they should not be stricter than TUF norms.
Mechanism for release of
subsidy
16. The scheme would be operated by Office of
the Textile Commissioner.
17. The eligible MSME unit will approach the
lending agency for a term loan with their project proposal. The lending agency
would advise the Office of the Textile Commissioner after sanction of the loan
in the prescribed format as at Appendix-I.
18. The MSME entrepreneur would submit
application for claim to Office of the Textile Commissioner in the prescribed
format as at FR 1.
19. The MSME entrepreneur would release his
promoter’s contribution of 15% directly to the machinery manufacturer. The
lending agency would release the loan to the machinery manufacturer when
machinery are ready for dispatch. In case, with the loan amount, 85% of the
cost of the machinery is not met, the MSME entrepreneur would make good the
remaining amount to the machinery manufacturer from his own resources.
20. The machinery manufacturer would install
and commission the machinery on receiving 85% of the cost of the machinery.
After satisfactory commissioning of the machinery, the machinery manufacturer /
MSME entrepreneur would inform the Office of the Textile Commissioner.
21. In case of imported machinery, the MSME
entrepreneur would inform the Office of the Textile Commissioner after
commissioning of the machinery.
22. Textile Commissioner would constitute
inspection teams on regional basis to inspect and certify the commissioning of
the machinery. It would be ensured that Certification Committee issues a
certificate within 15 days from date of intimation by the machinery manufacturer.
23. The 15% subsidy would be released by the
Office of the Textile Commissioner to the unit’s bank account after receiving
the report from the inspection team. The Office of the Textile Commissioner
would ensure that 15% subsidy is released within one month of issue of the
certificate by the Certification Committee.
24. In respect of TUFS compatible imported
machinery, the MSME entrepreneur will need to open a LC in Bank to make the
purchase. In such cases, the 15% subsidy would be released directly to the MSME
entrepreneur’s bank account after receiving installation and commissioning
report of the imported machinery.
25. In case MSME entrepreneur avails of
bridge finance from the lending agency for the 15% margin money subsidy to be
given, the 15% subsidy would be released by the Textile Commissioner directly
to the lending agency.
26. Advance / token payment of machine cost
can be paid by the unit prior to the date of sanction of term loan. However,
machines purchased on or after date of sanction of term loan will be eligible
under TUFS subject to fulfillment of other terms and conditions.
Safeguard against
mis-utilisation
27. To prevent mis-utilisation of margin
money subsidy, it is expected that unit should atleast function for a minimum
period of three years from the date of disbursement of subsidy. To monitor the
functioning of the unit for three years the lending agency should keep the
minimum repayment period including moratorium period as three years.
28. After sanction of the assistance lending
agencies will get an agreement executed by the small scale unit on behalf of
Government of India. A copy of the draft agreement to be executed by the
eligible PLI with MSME unit is at Appendix- II.
29. Textile Commissioner would also
constitute a team comprising of senior officers of the Head office to
periodically inspect on random basis, the machinery installed /commissioned.
Monitoring of the progress
of the scheme
30. The TAMC will monitor the progress of the
scheme.
Grievance Committee
31. Grievance of the MSME entrepreneurs after
purchase of machinery under the scheme, would be considered by a grievance
committee under the chairmanship of the Textile Commissioner comprising of
representatives of industry associations and TMMAI and ITMMA.
Annex – G
OPERATIONAL GUIDELINES OF
CAPITAL SUBSIDY @ 15% UNDER TUFS FOR
BRAND NEW SHUTTLELESS LOOMS
1. An additional incentive of 15 percent
capital subsidy in addition to 6 percent interest subsidy has been provided for
specified weaving machinery i.e. brand new shuttleless looms.
Duration of the scheme
2. The operation of capital subsidy @15%
under TUFS will be co-terminus with RR-TUFS.
Eligibility
3. The 15% capital subsidy will be available
only for such projects where term loans have been sanctioned by the nodal
agencies / nodal banks / co-opted PLIs.
4. The capital subsidy on brand new
shuttleless looms would be available to all the textile units eligible for
loaning under TUFS.
Quantum of subsidy
5. The 15% capital subsidy will be available
on brand new shuttleless looms and will be worked out on the basic value of the
machinery and exclude the tax component for the purpose of valuation. In other
words, for indigenous machinery the basic price and for imported machinery CIF
price would be considered for working out subsidy.
6. The 15% capital subsidy will not be
available for a project as a whole but only on the specified machinery. The
project as a whole including the specified machinery will continue to be
eligible for 6
percent interest incentive on the TUF
compatible investment.
Release of capital subsidy
7. The capital subsidy would be released by
the lending agencies at the time of disbursement of
term loan for the specified machinery.
8. The capital subsidy can also be adjusted
against promoter’s contribution.
9. To prevent mis-utilisation of capital
subsidy, it is expected that unit should at least function for
a minimum period of three years from the date
of disbursement of subsidy.
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