INDIAN STATES : UTTAR PRADESH

Investment Incentives

The Government of Uttar Pradesh is committed to provide high standard, plentiful infrastructure facilities, enabling conducive policy framework and an investor friendly environment for ensuring higher industrial growth in the state. The state recognizes its role in nurturing economic activity and entrepreneurship and places high priority on providing outstanding infrastructure to the industry

Incentives under the industrial and service sector investment policy - 2004:

Financial Assistance: Infrastructure Projects

• Industrial Estates for IT/BT units are eligible for 50 per cent of investment or US$541,913.99 whichever is less.
  
• Other industrial estates are eligible for 20 per cent of investment or US$ 541,913 whichever is less.
  
• Call centre hubs having covered area of not less than 10,000 m2 are eligible for 50 per cent of investment or US$ 108386.66 whichever is less.
  
• Convention halls, multimedia centres, exhibition grounds and business trade centres will also be entitled to certain incentives on the fulfillment of certain prerequisites.
  
• Laboratories for quality control and Research and Development for products of small-scale industries are eligible for 50 per cent of investment or US$ 216, 780.09 whichever is less.

Stamp Duty and Registration Charges on Land

• 100 percent exemption from payment of stamp duty on:
  • New small-scale units in 24 districts of Poorvanchal and 7 districts of Bundelkhand.
    
  • Infrastructure projects.
    
  • IT/BT and food processing units and call centers.
    
  • Service sector projects such as multi facility hospitals with specified facilities and having at least 100 beds; super specialty hospitals with specified facilities among others.
• Facility of registration of all industrial projects at concessional rate of Rs. 2 per thousand subject to a maximum of US$ 108.485

Fiscal Incentives- Service Sector

Certain Service sector projects will also be eligible for:

• Exemption from acquisition charges if land for the project is acquired by the Government.
  
• Exemption from entry tax on plant and machinery used for the establishment of project.
  
• Exemption from electricity duty for 10 years from the date of establishment.
  
• Exemption from development charges and malba charges levied by the development authority/local authority.
  
• Exemption from house-tax, water and sewage tax and all other taxes/charges levied by the development authority/local authority for five years from the date of establishment.

Investment Incentives under the information technology policy (2004)

• Preferential Allotment of Land: Preferential allotment of land will be made for IT industry by NOIDA/Greater NOIDA, UPSIDC/Development Authorities in the state.
  
• Exemption of Stamp Duty and Registration Fee: I.T units and call centres shall be given 100% exemption from payment of Stamp Duty and Registration fees.
  
• Uninterrupted Power: Continuous and uninterrupted power supply for IT industries. Exemption from power cuts without limit.
  
• Captive Power Generation: Encouragement to captive power generation in IT locations. I.T Units with 5 KVA power requirement can be set up anywhere irrespective of master plan or land use classifications.
  
• Incentives to Mega Investment Units: Information Technology and electronic units set up in the state with an investment of US$10.8484 million or more shall be classified as Mega Investment Units. The mega investment units will be entitled to a plethora of incentives including allotment of land on priority basis, interest free loans for a period of 15 years upto the amount of sales/trade tax liability among others.
  
• Venture Capital Fund: venture capital fund will be created with state government/PICUP/ UPSIDC/ UPFC/private enterprises/ SIDBI and others for IT sector.
  
• Special Financing Package will be developed by the State Financial Agencies to fulfill the unique needs of the IT sector.
  
• A Range of Trade Tax Concessions will also be provided to the IT sector.
  
• Power Tariff: IT units in information technology parks and STPs will be charged the same power tariff as the SSI.
  
• Exemption from Pollution Control Provisions.

Investment incentives under the biotech policy (2004)

• Single window facility and constitution of biotechnology development board.
  
• Relaxation of taxes on Biotechnology based products.
  
• Relaxation on land for establishment of biotechnological units.
  
• Biotechnological units shall be exempted for entry tax for fifteen years, on
  Capital goods including captive generation sets.
  
• Captive generation sets installed by biotechnological units shall be exempted of electricity tax for 10 years.
  
• Uninterrupted power supply.
  
• Relaxation in stamp duty and registration fee.
  
• Relaxation in zonal regulations.
  
• Projects where an investment of US$10.8484 million or more will be made either in expansion of existing units or in setting up a new unit, also such units which employ more than 250 people will be declared as mega projects. Such projects will be given relaxation under special package.
  
• Provision of cluster development fund /venture capital.
  
• Establishment of Biotech parks at NOIDA and Lucknow.

Investment incentives to SEZ developer and units (2006)

• SEZ developer and SEZ units shall be exempt from all kinds of taxes, cess or levies of the Government of Uttar Pradesh or taxes of any other local authority/agency for any transactions within the SEZ or any procurement of goods, supplies or services from the Domestic Tariff Area. Units in DTA would also be exempt from these on sales made by them to a SEZ unit or SEZ developer. These include UP trade tax, turnover tax, mandi tax, entry tax, development tax, local bodies tax, etc.
  
• SEZ developer and units would also be exempt from taxes levied by local bodies, as SEZs would be an industrial township under constitution of India and would be responsible for providing services within the zone.
  
• Developers, Co-developers of SEZs and units established/ to be established will get total exemption from the stamp duty & registration fee on first transaction but on implementation of amendments in the Indian stamp act -1899, as per third schedule of SEZ Act-2005, exemption will be applicable as provided therein.
  
• Facility for treating sales from SEZ to DTA as "imports" is not being implemented at this stage because many of the other states are not having any such policy. However, this point is subject to revision.
  
• Electricity duty and taxes shall be exempted on generated or purchased electricity for use in processing area of the SEZ for a period of 10 years from the date of production or start of service.
  
• SEZ will have freedom of generation, transmission, and distribution of electricity within the SEZ subject to provision of Electricity Act 2003. Wherever the consent of U.P. State Regulatory Commission will be required, same shall be obtained.
  
• Under the U.P. power policy, all admissible facilities shall be available to SEZ also.

Investment Opportunities

• Power
  
• Food processing
  
• Agro Based industries
  
• Animal Husbandry
  
• Engineering
  
• Horticulture
  
• Petrochemicals
  
• Sugar
  
• Silk

Useful Web Links

Government of Uttar Pradesh

U.P. Industries, Government of Uttar Pradesh

Uttar Pradesh State Industrial development corporation Limited