The investors would be left free to fix their own
tariff for various airport services without it being
a detriment to the development of the airport in the
short or long run.
The investors will be given complete freedom to
follow their own personnel and employment policy,
without being governed by the rules and practices
in other airports.
The Government will assist in the acquisition of
land.
The Government will help in obtaining fresh water
supply and power supply to the investors.
Incentives & assistance for ports:
Investors have freedom to follow their own personnel
and employment policy without being governed by the
rules and practices in other Indian ports.
The government will help in the acquisition of
land and water frontage on payment by the investors.
Wherever port land is available, it will be provided
to the investors at the rates prescribed by the Andhra
Pradesh government.
The land required for the industries which need
to be located close to a port, can be acquired by
the APHC on the basis of a feasibility report made
by the investor. If the investor wants to own the
land and lease it out to industries, the land can
be acquired at the prevailing market price under the
Land Acquisition Act.
The government will help in obtaining fresh water
supply and power supply to the investors.
Key policy changes in shipping & ports
Indian Ports Act amended to permit 100% foreign
ownership and foreign directors
Automatic approval for acquisition of all categories
of vessels
Cabotage laws relaxed
Package for the economic revival of shipyards
Reserve Bank of India to permit Foreign Exchange
for ships
Repairs/dry docking and spares for imported capital
goods, without any value limits.
Freight charges on movement of fertilizers & petroleum
products to be paid in convertible currency.
Guidelines for the development of ports:
Investors will ensure that the acquired land and
water frontage is used for providing port services
only.
Services will have to be provided efficiently and
economically. The minimum level of performance will
have to be guaranteed.
Parties permitted by the Government to set up and
operate the port terminal will be required to observe
the customs and laws of the land and also to follow
the rules and regulations. The parties will provide
facilities to the Customs Dept. and other government
agencies as per the rules.
Rebate in Power Bills:
All new industries, other than those ineligible (as
listed under 'Investment Subsidy'- for details on this,
please refer the A.P. State Policy for Incentives to
Industry) and other than those set up in the Municipal
Corporation areas of Hyderabad, Vijaywada and Visakhapatnam,
will be eligible for 25% rebate in power bills (both
demand and energy) for a period of 3 years from the
date of commencement of commercial production. The maximum
total admissible rebate for the three years will be
Rs. 50.00 lakhs in respect of large and medium industries
and Rs. 30.00 lakhs in respect of small scale industries.
Note: The existing procedure followed by the
District Industries Centre, of issuing an eligibility
certificate and that of the Andhra Pradesh State Electricity
Board, of issuing an Admission of Claim, will continue.
Special Tax Concessions:
The Government offers a wide range of concessions to
investors in India, to promote industrial growth and
exports. They include:
Deduction of preliminary and pre-operative expenses
in setting up a project.
Complete tax exemption for profits from exports.
Full or part exemption of foreign exchange earnings
on construction projects, hotels and tourism-related
services, royalties, commissions etc.
Five-year tax holidays within the first eight years
of commercial operations for 100% EOUs and units in
EPZ.
Tax exemption for income from export of computer
software or technical services.
Deduction of capital research and development expenditure.
Tax holiday for profits from new power projects
for the first five years of operation.
Special concessions to foreign companies in selected
areas: oil and gas operations, turnkey power projects
and shipping
Revenues accruing to foreign companies including royalties
and technical services fees)in connection with the exploration
or production of oil, enjoy special concessions in computation
of taxable income and are taxed at the rate of 50%,
instead of 65% which is the figure applicable for foreign
companies, as a rule.
Foreign companies engaged in the execution of turnkey
power project contracts, which have been approved by
the government and financed by an international aid
programme, are subject to a tax on a deemed profit of
10% of gross revenues.
Shipping companies are liable to pay tax on income
on a deemed profit of 7.5% of freight revenues earned
from shipping operations in India.
Relief for Foreign Nationals:
A 'short stay' exemption applies wherever all the following
conditions are met:
The individual is a foreign national employed by
a foreign company not doing business in India.
His stay in India does not exceed 90 days in a
tax year (extended to 183 days in certain tax treaties)
His remuneration is not deductible in arriving at
his employer's Indian taxable income.
Foreign technicians in certain prescribed areas
are eligible for a special exemption from tax on their
salary income. Their employers could pay the tax on
their salaries without such tax being held as part
of salary, for tax purposes.
Foreign nationals are exempt from tax for any home
leave travel benefits for themselves and their families,
provided by the employer.
Electronics Hardware Technology Park
(EHTP)/Software Technology Park (STP) Schemes:
In order to provide impetus to the electronics industry,
to enhance its export potential and to develop an efficient
electronic component industry, EHTP & STP schemes offer
a package of incentives and facilities. The scheme is
administered by the Department of Electronics, Government
of India and it's salient features are:
Duty-free imports are permitted for all types of
goods, including capital goods required by EHTP/STP
units for their production, provided that they are
not items in the negative list of imports of the EXIM
Policy.
Second-hand capital goods can also e imported by
EHTP/STP units in accordance with the EXIM Policy.
The entire production should be exported to hard
currency areas. Sales in the Domestic Tariff Area
(DTA) are permissible as per the norms decided by
the Department of Electronics and are subject to fulfillment
of value addition criterion as prescribed.
Units should operate in custom-bonded premises.
Tax holiday is admissible for such units for a block
of five years, in the first eight years of operation.
Deemed export benefits are also admissible.
100% foreign equity participation is permissible,
under the scheme.
The minimum value addition for software components
is 60%.
Incentives for IT units:
Software units are exempt from the purview of the
AP Pollution Control Act, except in respect of power
generation sets.
Industrial power tariff and all other admissible
incentives and concessions applicable to industries
in respect of power shall be applicable to the IT
industry, including those in the urban areas. A concession
of 25% on the power tariff shall be allowed to the
new IT industrial units for a period of three years
from the date of release of power or of going into
actual commercial production, whichever is comes first.
Software industries have been totally exempted from
the payment of sales tax, payable under the provisions
of the A.P. General Sales Tax Act, 1957.
The IT software industry is exempt from zoning regulations
for the purpose of location.
The govt. agrees in principle, with the suggestion
by the IT companies, of self-certification/exemption
as far as possible for the IT software industry, from
the provisions of the following Acts/Regulations:
The Factories Act.
The Employment Exchange (Notification of Vacancies
Act)
The Payment of Wages Act.
The Minimum Wages Act.
The Contract Labour (Regulation and Abolition)
Act
The Workmen Compensation Act.
The Andhra Pradesh Shops and Establishments Act
The Employees State Insurance Act.
General permission has been given to run a three-shift
operation.
Rebate in the cost of land allotted to an IT industry
at Rs. 20,000 per job created, subject to the following
conditions:
The rebate shall be restricted
to Rs. 20,000 per job created or the cost of the bare
land (excluding development charges) whichever is
less, subject to a ceiling computed at the rate of
.30 acres for every 100 jobs created, no concessions
are applicable.
The minimum number of employees
to be hired by a company in order to avail the concession
on land cost in excess of the limit, i.e. the ceiling
of .30 acres for every 100 jobs created, no concessions
would be applicable.
On areas allotted in excess
of the limit i.e. the ceiling of .30 acres for every
100 jobs created, no concessions are applicable.
The minimum gross salary/wage
for an employment to be considered to have been created
would be Rs. 5000/- per month. 5. The period for which
such employment would have to sustained to be eligible
to be reckoned for this incentive, shall be two years.
The number of employees
to be considered for the purpose of this provision
shall not exceed the number arrived at by the formula:
[no. of computer work stations at a location * (1.33)
* number of shifts (of 8hours each) operated by the
company at the location.]
APIIC shall specify suitable
guidelines to ensure that the benefit of this provision
reaches a company only after it meets the stipulated
conditions regarding job creation and that the employment
figures reported are corroborated by other supporting
data such as investment, turnover, returns filed with
RBI and returns filed with STPI, Hyderabad.
The concessions linked
to employment generation will be limited to the extent
of the number of persons of Andhra Pradesh origin
employed by the company. A company will be free to
employ persons as per their own policies subject to
conformity with local regulations as applicable. However,
the concessions available under this incentive will
be restricted to the number of persons of AP origin
employed by the company. For the purposes of this
provision, a person of AP origin is defined as a person
who, at the time of employment by the company, has
been
- a resident of the state of AP
- domiciled in the state of AP
- born in the state of AP
- studied in a school/college/university in the state
of AP
- a person either of whose parents were born or attended
school/college/university/ in AP or were domiciled in
AP.
For IT infrastructure companies establishing facilities
on private/APIIC/Govt. lands, concessions will be
in the form of rebate on registration and transfer
of property charges and exemption from stamp duty
on a tapering scale for sale/lease of built-up space
to the IT industry.
For facilities established
and sold/leased before 1-4-2000, the rebate is 90%
For facilities established
and sold/leased on or after 1-4-2000 but before 1-4-2001,
the rebate is 70%
For facilities established
and sold/leased on or after 1-4-2001 and up to 31-3-2002,
the rebate is 50%.
This concession will be
available only to IT parks notified by the department
of Information Technology and Communications ( I.T.&C)
and which provide certain minimum facilities like
uninterrupted/back up power and supply of reliable
telecom links.
The rebate would be available
only for the first transaction, when the first sale
by the infrastructure company is made to an IT industry.
The above concession would
also be available on the purchase of land by an IT
industry establishing an IT park for its own use,
provided it does not avail the concession linked to
employment, mentioned above. IT & C Dept. would stipulate
such conditions as may be necessary in this regard,
while notifying such IT parks.
For It industry/IT infrastructure companies establishing
facilities on private lands outside the limits of
the Municipal Corporations and the nine surrounding
municipalities of Hyderabad and Gaddiannaram village,
relaxation of FAR to the extent of 50% of the prevailing
norm will be available. For example, if the normal
FAR were 1.5, the FAR allowed in such cases would
be 2.5.
1. This concession would be available only to IT parks
notified by the Department of Information Technology
and Communcations and which provide certain minimum
facilities like uninterrupted/back-up power, reliable
telecom links etc.
2. This incentive would not be available in respect
of government/APIIC lands allocated at a concessional
price.
District headquarters and other major economic nodes
in the state like Vijaywada and Tirupathi offer highly
competitive locations for IT parks for IT Enabled
Services as skilled and semi-skilled manpower is readily
available at these locations and the cost of living
is very low. The govt. will consider providing required
telecommunication linkage through the A.P State Wide
Area Network (APSWAN) to such IT parks.
Investment subsidy for new IT (hardware and software)
industries: Investment subsidy:20% of the fixed capital
investment but not exceeding Rs. 20 lakhs; however
in respect of entrepreneurs belonging to the scheduled
castes and scheduled tribes categories, the investment
shall be 25% of the Fixed Capital Cost, not exceeding
Rs. 50.00 lakhs. This subsidy shall not be available
to IT industries availing of the rebate on land cost.
[Fixed capital investment, wherever mentioned, refer
to the original fixed capital invested in the project,
before depreciation.]
The IT & C Dept. shall prescribe a procedure for
scrutiny and sanction of the claim of units involving
eligible capital investments as specified from time
to time. The Commissioner of Industries shall pay
the sanctioned amounts to the units from the same
provision and head of account from which investment
subsidy is paid to industries.
The decisions of the Information Technology and
Communications Department shall be final in scrutinizing
and deciding the eligible investment and sanctioning
the incentives for eligible industries.
Special incentives for mega projects/pioneering
projects:
Mega projects, with investment exceeding Rs. 100 crores,
will be considered on a case-by-case basis and a Special
Package of Incentives based on gestation period of the
project, pioneer nature of the project, vocational aspects,
state of the art technology, profitability, scope for
further related investment etc may be worked out. This
package will include any similar incentives of State
Government/Central Government institutions/agencies
already availed/Central incentives, which may be announced
from time to time by the Governemnt of India and other
such incentives extended by any other Government agency.
It will initially be valid for a period of three years
and subject to review thereafter.
5:10:07 PM 
Trade
and Commerce
