Gujarat Scheme for Sick Industry

Gujarat Scheme for Sick Industry

Gujarat Scheme for Sick Industry

The “Relief and concessions to the viable Sick Industrial Enterprises” was launched by the Government of Gujarat for the rehabilitation of sick enterprises registered with the BIFR/GBIFR. Under this scheme, the Government provides the sick MSMEs and large enterprises with the grant of relief and concessions for converting their non-productive assets into productive assets. In this article, we look at the Relief and Concessions Scheme to the viable Sick Industrial Enterprises in detail.

To know about Concessions available for Small Business in India

Eligible Entities

Micro, Small and Medium industrial enterprise

Any MSME registered under MSME Act having the EM Part II acknowledgement and also satisfies the following criteria of a sick enterprise under GBIFR are eligible to apply for the scheme.

  • There is erosion in the net worth occurred due to accumulated cash losses to the amount of 50 per cent of its net worth during the previous accounting year
  • The enterprise has been in commercial production for at least 2 years

Large industrial enterprise 

Any Large industrial enterprise fulfilling the following criteria of a sick industrial enterprise will be eligible:

  • The enterprise should have SIA registration/or any Licence/Registration issued by the competent authority.
  • There is erosion in the net worth occurred due to accumulated cash losses to the amount of 50 per cent of its net worth during the previous accounting year.
  • The enterprise should be incorporated before 5 years and has been in commercial production for at least 2 years

Documents Required

The below following are the document checklist in order to avail the Relief and Concessions Scheme.

  • Audited accounts documents of the enterprise for the preceding three year
  • Repayment document of dues to the banks or financial institutions (if any)
  • Outstanding document dues of the State Government and State PSUs

Note: The Industries Commissioner will prescribe application form, checklist and such other documents required for applying and sanctioning for the reliefs and concessions under this scheme.

Settlement of Dues

A sick enterprise, which is required to make payment of any outstanding dues under this scheme are provided with various options to make payment of outstanding dues in the manner stipulated below:

Options

Amount of Outstanding DuesRelief

Down Payment

Option (i)In case if the sick enterprise makes an entire payment of all the outstanding dues and expenses incurred by the concerned government offices within 6 months of the sanction letterRemission of the entire amount of interest, penal interest and penalty10%
Option (ii)If the dues paid within 24 months of the sanction letterRemission of the entire amount of interest, penal interest and penalty10%
Option (iii)In such case, the sick industrial unit will be expected to pay simple interest at 9% on the outstanding dues payable from the date of sanction letter issued under this schemeRemission of the entire amount of interest, penal interest and penalty.10%

Application Procedure

Kindly follow the below steps to file the application for Relief and Concessions Scheme.

Step 1: The applicant enterprise must visit the office of the Industries commissioner/commissioner (MSME) for availing the reliefs and concessions for sick companies.

Step 2: As per the Government Resolution, the registration criteria of Micro, Small and Medium Enterprises will be given by the office of the MSME Commissioner.

Step 3: As per the Government Resolution, the registration criteria of Large Enterprises will be given by the Industries Commissioner.

Step 4: The Sick GBIFR cases will be decided by a committee chaired by the Industries Commissioner.

Step 5: The Sick BIFR cases having total outstanding dues above Rs. 10 crores and up to Rs. 25 crores will be decided by a committee chaired by Additional Chief Secretary or Principal Secretary.

Step 6: The cases having total outstanding dues above Rs. 25 crores and up to Rs. 50 crore will be decided by a committee chaired by the Chief Secretary.

Step 7: The cases having total outstanding dues above Rs. 50 crores will be decided by a High Power Committee (FPC).

Step 8: An application for relief and concession received under this scheme, will be decided by the Committee chaired by Chief Secretary.

Step 9: The cases to be placed before the High Power Committee will first be placed before the committee chaired by the Chief Secretary for examination and recommendation to HPC.

The notification of the scheme can be accessed here.

Gujarat Scheme for Sick Industry

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