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| No.
28(19)/2005-MS/ |
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Date:
8th Sept., 2005
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Circular
No. 5
(2005-2006 Series)
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Sub: |
Technology Upgradation Fund Scheme
(TUFS).
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Credit
Linked Capital Subsidy @ 20% under TUFS (CLCS@20%-TUFS
) for Powerloom sector –
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The Government has approved the following modifications in the
Credit Linked Capital Subsidy @ 20% under Technology Upgradation
Fund Scheme (CLCS@20%-TUFS) with
effect from 1st Sept., 2005.
Benchmarking
of price under the scheme.
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| 1. |
The
price benchmarking of the eligible indigenous machinery under CLCS @
20% under TUFS has been done away with.
However, price benchmarking of imported second hand looms will
continue. The benchmarked
prices of imported 2nd hand looms are given in circular
no.1 (PDC 2003-2004 series) dated 11th Feb., 2004 and
circular no.1 (2005-2006 series) dated 21st April, 2005.
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| 2. |
In
place of price benchmarking of the indigenous machinery, the machinery
manufacturer shall be benchmarked. The criteria for benchmarking of
the machinery manufacturers shall be evolved by the office of the
Textile Commissioner in consultation with Textile Machinery
Manufactures Association (TMMA).
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| 3. |
The
indigenous machinery manufacturers whose machinery has been
benchmarked under CLCS @ 20% - TUFS as on date will be considered as
benchmarked manufacturer under the scheme subject to the condition
that such manufacturers obtain ISO-9001 by 31st December
2005 and also they fulfill the criteria which will be fixed for
benchmarking of manufacturer as given in para 2 herein above.
The existing benchmarked machinery manufacturer which fail to
obtain ISO-9001 by 31st December 2005 shall ceased to be
eligible under the scheme. (List
of eligible machinery manufacturers as on date is available in the
website of office of the Textile Commissioner, i.e., www.txcindia.com).
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| 4. |
The
list of eligible machinery under CLCS @ 20% - TUFS is as given in Annex-I.
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Additional
option under CLCS@20%-TUFS |
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| 5. |
The
government has provided an option to the powerloom units to avail of
20% capital subsidy on ‘front
ended’ basis along with bank finance.
The operational guidelines for releasing of 20% capital subsidy
are as follows:
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| i) |
The
powerloom unit will approach the lending agency for term loan
and bridge finance for 20% capital subsidy 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 (Annex-II of Circular No.7 (2003-2004 series) dated 23rd
Jan., 2004).
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| ii) |
Under
the scheme, the lock in period for term loan would at-least be
of 3 years as in the case of CLCS@15%-TUFS.
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| iii) |
The
powerloom entrepreneur would release his initial contribution of
minimum of 15% directly to the machinery manufacturer.
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| iv) |
The
lending agency would release the term loan as well as bridge
finance to the machinery manufacturers when machinery is ready
for dispatch.
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| v) |
As
in the existing scheme the machinery manufacturer would continue
with casting / engraving of the nine-digit identification code
for each machinery as detailed out in Circular No.7 (2003-2004
series) dated 23rd Jan., 2004 as amended from time to
time.
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| vi) |
The
machinery manufacturer/powerloom entrepreneur would install and
commission the machinery and inform the lending agency about
commissioning of the machinery.
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| vii) |
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 existing guidelines as detailed
out in Circular No.7 (2003-2004 series) dated 23rd
Jan., 2004 as amended from time to time.
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| viii) |
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 20% capital subsidy in the prescribed
format (Annex-II). The
lending agency, along with this declaration will also send the copy
of the invoice, which should invariably have all the
specification of the machinery and also the 9-digit
identification code to the office of the Textile
Commissioner.
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| ix) |
Based
on the documents so received from the lending agency, the O/o
the Textile Commissioner would release
the capital subsidy to the lending agency.
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| x) |
20%
capital subsidy will be worked out on the basis of invoice price
inclusive of excise duty and sales tax/VAT in respect of
indigenous machinery. The lending agency should provide bridge
finance to the extent of 20% of eligible investment.
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| xi) |
In
respect of brand new imported machinery, the 20% capital subsidy
will be worked out on the basis of CIF price plus actual
customs duty paid while in respect of second hand imported
machinery, the 20% capital subsidy will be worked out on the
basis of benchmarked price as fixed by Textile Commissioner from
time to time or CIF price whichever is lower inclusive of actual
customs duty paid.
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| xii) |
In
case the lending agencies give bridge finance more than the
eligible 20% capital 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.
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| xiii) |
Textile
Commissioner would constitute a team comprising of senior
officers of the Head office to periodically inspect on random
basis the machinery installed/commissioned.
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The above modifications
in the TUF scheme may please be brought to the notice of all
concerned. |
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(Smt
Shashi Singh)
Joint Textile Commissioner
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Annex – I
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List
of eligible machinery under CLCS@20%-TUFS
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Sr.
No.
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List
of machinery
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1
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Semi-automatic
looms
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2
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Automatic
shuttle stop change loom
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3
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Pirn
changing automatic loom
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4
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Shuttleless
rapier loom
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5
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Dobby
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6
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Jacquard
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7
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Pirn
winding
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8
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Sectional
warping machine
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9
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Warping
machine
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10
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Sizing
machine
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11
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Two-for-one
twister (with cradle, drop wire system and overfeed system
w.e.f. 1st April, 2005 as per circular no.2 (PDC
2004-2005 series) dated 29th Dec., 2004).
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12
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Prewinder
/ rewinder
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List
of accessories eligible under CLCS@20%-TUFS |
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Semi-automatic
loom and automatic shuttle stop change loom
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Heald frame (shaft) 6 Nos.
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Heald wires (6000 Nos.)
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Weavers beam (1 No.)
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Drop pins (drop wires/droppers) (6000 Nos.)
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Temple set
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Optical weft feeler & electrical warp stop motion
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Motor (1 No.)
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Automatic
pirn changing loom
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Warp beam (1)
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Cloth roller (1)
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Motor (1)
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Heald frame (6 Nos.)
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Heald wires (6000)
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Drop pins
(6000)
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Shuttle (1 No.)
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Shuttleless
rapier loom
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Warp beam (1)
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Cloth roller (1)
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Heald frame (6 Nos.)
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Heald wires (6000)
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Drop pins (6000)
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Annex – II |
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FORMAT
Format
to be submitted by the lending agencies for claiming subsidy from
the Office of the Textile Commissioner. |
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Dated
: _______________ |
Name
& Address of the Lending Agency:
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1
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Name
& Address of borrower
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2
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Whether
SSI unit or not
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3
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Name
of the promoter(s)
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4
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Type
of firm (Proprietorship / Partnership / Limited Company /
Cooperatives / Others)
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5
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Project
Cost (Rs.)
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(a)
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Promoters
Contribution (should be minimum of 15%)
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(b)
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Term
loan disbursed
(L.C.
No. in case of imported machinery)
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(c)
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Bridge
Finance disbursed
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6
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Details
of machinery covered under CLCS@20%-TUFS
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(a)
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Indigenous
machinery
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Sr.
No.
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Description
of machinery
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Name
and address of machinery manufacturer and code number
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No.
of machines
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Nine
digit code number(s)
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Invoice
Price (Rs.)
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(b)
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Imported
machinery
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Sr.
No.
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Description
of machinery
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No.
of machines
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Brand
New or
second
hand
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Sr.
No. of machine(s)
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Date
of Bill of Entry
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Invoice
Price
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CIF
price
(In
rupee terms) or benchmarked price in respect of 2nd
hand imported looms whichever is lower plus actual
customs duty paid as per Bill of entry
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| Documents
to be enclosed: |
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Sr.
No.
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Description
of document
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Please
tick if enclosed and write N.A. if not applicable
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1
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SSI
certificate or any document (i.e., C.A. Certificate, banker
certificate) to prove that unit is a SSI unit.
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2
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In
case of same location, a copy of separate electricity bill.
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3
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Invoice
with full details including accessories and also indicating 9
digit code number.
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4
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Bill
of entry in case of imported machinery.
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5
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Chartered
Engineer’s certificate indicating the vintage and residual
life of looms (As per the guidelines upto 22.02.2005, the
vintage period of looms is 10 years with a residual life of 10
years and after 22.02.2005, the vintage period of looms is 15
years with a residual life of 10 years.
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6
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Copy
of Letter of Credit in case of imported machinery.
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7
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Declaration
from the borrower that he has not exceeded the subsidy limit
of Rs.20 lakh since inception of the scheme.
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