Details
The government of India has approved
the scheme “Production Linked Incentive Scheme for Automobile and Auto
Components Industry” in India to enhance India’s Manufacturing Capabilities for
Advanced Automotive Products.
The “Production Linked Incentive Scheme
for Automobile and Auto Components Industry” proposes financial incentives to
boost domestic manufacturing of Advanced Automotive Technology products and
attract investments in the automotive manufacturing value chain. Its prime
objectives include overcoming cost disabilities, creating economies of scale,
and building a robust supply chain in areas of Advanced Automotive Technology
products. It will also generate employment. This scheme will facilitate the Automobile
Industry to move up the value chain into higher value-added products.
Scheme Components: The scheme consists of two
components incentivizing incremental sales of automobile and auto components
related to Advanced Automotive Technology.
1. Champion
OEM Incentive Scheme:
The incentive scheme targeted to
address the cost disabilities related to Advanced Automotive Technology
vehicles faced by OEMs. The Champion OEM Incentive scheme is a ‘sales value
linked’ scheme, applicable to Battery Electric Vehicles and Hydrogen Fuel Cell
Vehicles of all segments – 2 wheelers, 3-wheelers, passenger vehicles,
commercial vehicles, Tractors, Automobiles meant for Military use, and any
other Advanced Automotive Technology vehicle as prescribed by MHI depending
upon technical developments.
2. Component
Champion Incentive Scheme:
The ‘Component Champion’ Incentive
scheme is aimed at identifying and incentivizing Auto component champions that
can achieve the global scale of operations and become ‘Automotive Champions’
for the auto-component manufacturing sector related to Advanced Automotive
Technology.
Eligible Product:
1. Pre-approved
Advanced Automotive Technology Vehicles and pre-approved Advanced Automotive
Technology Components of all vehicles, CKD/SKD kits, Vehicle aggregates of 2-
Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles, and tractors
including automobiles meant for military use.
2. The
list of Advanced Automotive Technology Vehicles and Advanced Automotive
Technology Components will be prescribed and can be amended by MHI from time to
time depending upon technological developments.
Benefits
The approved applicants will be
entitled to receive incentives (% benefit) subject to meeting other conditions
of the scheme:
1. Incentive Slabs for Champion OEM and New
Non-Automotive (OEM) Investor company:
|
Determined Sales Value (in ₹ Crore) |
Incentives (%age of Determined Sales Value) |
|
<= 2,000 |
13% |
|
> 2,000 to 3,000 |
14% |
|
> 3,000 to 4,000 |
15% |
|
> 4,000 |
16% |
|
Cumulative Determined Sales Value of ₹10,000 Crore over
5 years |
Additional 2% |
2. Incentive slab for Component Champion and New
Non-Automotive (Component) Investor Company:
|
Determined Sales Value (in ₹ Crore) |
Incentives (%age of Determined Sales Value) |
|
<= 250 |
8%* |
|
> 250 to 500 |
9%* |
|
> 500 to 750 |
10%* |
|
> 750 |
11%* |
|
Cumulative Determined Sales Value of ₹1,250 Crore over
5 years. |
Additional 2% |
|
Battery Electric vehicles & Hydrogen fuel cell
vehicles components |
Additional 5% |
*Multiplied by a factor of 0.9 in the fifth year for
eligible sales relating to Internal Combustion Engine (ICE) vehicle components.
Eligibility
The applicant company or its Group
company(ies) will need to meet the following common criteria to qualify and
receive benefits under the Scheme:
Basic Eligibility Criteria:
1. For a company or its Group company(ies) with an
existing presence in India or globally in the Automotive vehicle and components
manufacturing business:
|
Eligibility Criteria |
Auto OEM |
Auto-Component |
|
Global group* Revenue (from automotive and/or auto
component manufacturing) |
Minimum ₹ 10,000 crore |
Minimum ₹ 500 crore |
|
Investment |
Global Investment of Company or its Group* Company(ies)
in fixed assets (gross block) of ₹ 3,000 crores. |
Global Investment of Company or its Group* Company(ies)
in fixed assets (gross block) of ₹150 crores. |
*Group Company(ies) shall mean two or more enterprises
which, directly or indirectly, are in a position to:
Exercise twenty-six percent or more of voting rights in
the other enterprise;
Or
Appoint more than fifty percent of members of the Board
of Directors in the other enterprise (As defined in the FDI Policy Circular of
2020).
2. For new non-automotive investor companies or its
Group company(ies) that may want to participate in this scheme:
|
Eligibility Criteria |
New Non-Automotive investor company or its Group
company(ies) (who are currently not in the automobile or auto component
manufacturing business) |
|
Global net worth |
₹ 1000 crore based on audited financial statements for
the year ending March 31, 2021. |
|
Committed investment in India over five year period |
As per Minimum New Domestic Investment Conditions
mentioned below. |
3. Minimum New Domestic Investment Conditions: Cumulative
New Domestic Investment Condition of Performance (₹.Crore)
|
Cumulative new domestic investment to be achieved |
Champion OEM (Except 2W & 3W) |
Champion OEM 2W & 3W |
Component Champion |
New Non-Automotive Investor (OEM) company or its Group
company(ies) |
New Non-Automotive investor (Component) company or its
Group company(ies) |
|
Upto or before March 31, 2023 |
300 |
150 |
40 |
300 |
80 |
|
Upto or before March 31, 2024 |
800 |
400 |
100 |
800 |
200 |
|
Upto or before March 31, 2025 |
1400 |
700 |
175 |
1400 |
350 |
|
Upto or before March 31, 2026 |
1750 |
875 |
220 |
1750 |
440 |
|
Upto or before March 31, 2027 |
2000 |
1000 |
250 |
2000 |
500 |
Note 01: An applicant company or its
Group company(ies) must satisfy the entire eligibility criteria to be eligible
under the scheme.
Note 02: Non-Automotive companies or its
Group company(ies) can qualify for this scheme provided they present a clear
business plan to invest in India and generate revenues from Advanced Automotive
Technology vehicles or Advanced Automotive Technology components manufacturing.
Note 03: The applicant's new Non-Automotive
Investor company or its Group company(ies) will be eligible to claim incentive
subject to meeting the cumulative minimum new domestic investment to be
achieved for a particular year. The applicant will also have to meet the %
Year-on-Year growth criteria from the minimum threshold fixed from the first
year.
Note 04: An applicant new Non-Automotive
Investor company or its Group company(ies) must satisfy the entire eligibility
criteria.
Note 05: New investments should be made from
the same legal entity as the one applying for the incentive.
Note 06: The approved Company is required to
meet the cumulative investment condition for each year.
Note 07: In the event, any approved company
meets the investment condition a few years before the end of the scheme; it
will be eligible for incentives throughout the tenure of the scheme subject to
meeting other conditions of the scheme.
Note 08: In case the approved company fails
to meet the cumulative domestic investment condition in any given year, it will
not receive any incentive for that year even if the threshold for Determined
sales value is achieved. However, it will still be eligible to receive the
benefits under the scheme in the following years if it meets the cumulative
domestic investment condition defined for that year.
Note 09: Preference will be given to
eligible companies or its Group company(ies) committing to front-load their
investment during the scheme period. The proposed investment commitment will be
evaluated by calculating the Net Present Value (NPV) of the investment using
the bank rate as the discounting factor.
Application Process
Online
The window for receiving applications
through the Notice Inviting Applications will be for a period of 60 days.
Step 01: The applicant companies are
required to submit an application along with financial & supporting
documents.
Step 02: All applications will be submitted
through an online portal maintained by the PMA. https://pliauto.in/
Step 03: Applicants need to "Sign
in" using their login credentials and apply for the scheme. https://pliauto.in/login
Step 04: The Application Form along with
details of all necessary supporting documents, to be submitted at the time of
application.
Step 05: A non-refundable application fee
would be payable for each application.
Step 06: Upon successful submission of an
application, PMA will issue a unique Application
ID to the applicant for all future references
pertaining to the Scheme.
Note 01: The PMA will process the
applications and make appropriate recommendations for approvals under the
Scheme.
Note 02: MHI will consider applications, as
recommended by PMA through the appropriate channel, for approval under the
Scheme.
Note 03: All the applications will be
finalized within 60 days from the date of submission of applications or receipt
of clarification sought, if any.
Note 04: After receiving approval, the PMA
will arrange to issue a letter to the selected applicant within 5 working days,
communicating approval under the Scheme.
Note 05: If a selected applicant is found to
be ineligible at any stage, or if it has not complied with notifications,
orders, guidelines etc. of the Scheme, the envisaged incentive claim of such
selected applicant shall be forfeited or recovered with interest, if already
paid.
Documents Required
1. Certificate of Incorporation
(Issued by ROC)
2. Memorandum & Articles of
Association (Submitted to ROC)
3. PAN Card
4. Import Export Code (IEC)
Registration Certificate
5. Letter of Authorization by Board
of Directors or Managing Director or Equivalent (incl. subsidiary(ies))
6. Certificate from the Company
Secretary of the Applicant / Managing Director for Credit History (incl.
subsidiary(ies))
7. CIBIL Report of the Company (incl.
subsidiary(ies))
8. Business Profile/ Corporate
Presentation of the Applicant (incl. subsidiary(ies))
9. GST Registration Certificate
(incl. subsidiary(ies))
10. Shareholding Pattern (Latest
submitted with ROC and certified by the Company Secretary of the company or in
case the applicant is not having any 'Company Secretary' - by the Managing
Director) (incl. subsidiary(ies))
11. Profile of Directors
12. Annual Report of Holding Company
13. Self-Certification on Revenue/
Investment/ Net worth from each of the Group Company (ies) whose credentials
have been considered
14. Financial Details of
Subsidiary(ies)
15. Project Report/ Business Plan
(incl. for Subsidiary(ies))
16. Application Fee Payment Proof
Frequently Asked Questions
Who is an applicant under the scheme?
An applicant under the scheme is a i.
Company incorporated/ registered in India under the Companies Act, 2013,
engaged in the automotive and/or auto component manufacturing sector or ii. New
Non-Automotive Investor company (who is currently not in an automobile or auto
component manufacturing business) incorporated/ registered in India under the
Companies Act, 2013 meeting the eligibility criteria specified under the scheme
and making an application for seeking approval under the Scheme.
What are the circumstances under
which an applicant may be ineligible for the scheme?
The applicants whose accounts are
declared as Non-Performing Asset (NPA) as per RBI guidelines or defaulter or
wilful defaulter as per RBI/CIBIL or SEBI debarred list or reported as fraud by
any bank, financial institution or non-banking financial companies etc. would
be considered ineligible. Further, there should not be any insolvency
proceedings admitted against the Applicant in the National Company Law Tribunal
(NCLT) etc.
Can an applicant have multiple
manufacturing facilities?
An applicant can have multiple
manufacturing facilities/ locations in India.
Are Greenfield projects and
Brownfield projects both allowed under the scheme?
Yes, Greenfield projects and
Brownfield projects both are allowed under the scheme.
Whether a Proprietorship, Partnership
and Limited Liability Partnership (LLP) could avail PLI benefits?
No, Proprietorship, Partnership, and
LLPs are not allowed under the scheme. Any company incorporated in India and as
defined in the Companies Act 2 of 16 2013, proposing to manufacture one or more
eligible product(s) under the scheme, can be an applicant.
Can a 100% foreign-owned company be
eligible under PLI Scheme?
Yes, but it has to be registered in
India to apply under the scheme.
Do the Value-Added Resellers and
Trading companies which are not in manufacturing business qualify under the
scheme?
Yes, any Company registered in India
under the Companies Act can apply under the scheme subject to meeting the
eligibility criteria and establishing a manufacturing facility for production
of the eligible products under the scheme.
Can two or more companies of the
Group apply through a single common Application?
Any number of companies of the Group
is permitted to apply under this scheme as an individual applicants by
submitting separate applications. However, they can use the global group
revenue, gross block, and net worth of the Group in their separate applications
respectively.
How many components are there in this
scheme?
There are two components in the
scheme i. Champion OEM incentive scheme ii. Component Champion incentive scheme
Can a company submit Multiple
Applications as Applicant under different Categories?
An applicant eligible for applying
under Champion OEM can also apply for the Component Champion segment. However,
an auto component manufacturer as an applicant eligible for applying under the
Component Champion segment cannot apply under Champion OEM.
Can an applicant approved under both
Champion OEM and Component Champion segment claim incentive for the same
component under both segments?
An approved legal entity as an
Automotive OEM company or New NonAutomotive Investor company can avail
incentives under both components of the scheme subject to the condition that
any eligible product shall be incentivized only once under the scheme. Any
double claim of incentive for the same product under component level and
vehicle level can lead to the qualification of the legal entity involved on
this ground alone in addition to any other legal action as applicable under the
law.
In case the outlay of incentive
exceeds, will the budgetary outlay be enhanced?
This is a fund-limited scheme. In
case the calculated incentive pay-out exceeds the budgetary outlay, the scheme
could be exhausted earlier than 5 (Five) years period and the incentive pay-out
will be reduced on a pro-rata basis as per the formulation developed across all
PLIs.
Is there any segregation in the
budgetary outlay based on vehicle segments like 2W, 3W, 4W, CV, Tractors and
Vehicles used for military purpose etc.?
No. There is only one allocation in
the scheme.
Is there any segregation in the
budgetary outlay for vehicles and Auto components in the scheme?
No. There is only one allocation in
the scheme.
What is the period for making an
application under the Scheme?
The window for receiving applications
through the online portal of the scheme shall be 60 days starting from the date
of Notice Inviting Applications.
What is the base year for calculation
of eligible sale value?
Financial Year 2019-20 shall be
treated as the base year for calculating eligible sale value (not applicable
for approved new non-automotive investor companies).
Can any applicant company claim
incentive for any Automobile or Auto component manufactured by them?
No. The applicant company once
selected and approved under the scheme can claim an incentive on the Determined
sales value of eligible Advanced Automotive Technology products prescribed by
MHI.
Can any approved company claim scheme
incentive for all Advanced Automotive Technology (AAT) products manufactured by
them?
Any approved company can claim
incentive under the scheme for only those Advanced Automotive Technology
products meeting the condition of minimum 50% domestic value addition.
When can an applicant submit a claim
for disbursements under PLI?
An applicant may submit a claim for
disbursement of incentive within 6 (six) months from the end of the financial
year to which the claim pertains or within 3 (three) months from the date of
finalization of Audited Financial Statements for the same financial year,
whichever is later. Claim for any financial year period shall be made only
once, unless withdrawn, and no subsequent part claims shall be allowed for the
said period.
Sources And References
Guideline CLICK HERE
Notification CLICK HERE
Official Website CLICK HERE
