Published in Part I, Section I of the Gazette of India Extra-ordinary dated 27.07.1971 (No. 102) vide Notification No. F. 6(26)/71-IC dated 23.07.1971 and amended vide Notification No. 6(26)/71-IC dated 28.02.1974 published in the Part I, Section I of the Gazette of India Extra-ordinary dated 28.02.1974 (No. 103) and Notification No. 6/3/75-RD dated 19.07.1978 Notification No. 11/1/90-DBA.II dt. 28.07.1993 & 29.09.1995 and No. 11(1)/98-DBA.II dated 29.01.1998.
No. 6(26)/71-IC – The Government of India are pleased to make the following scheme for grant of subsidy on the transport of raw materials and finished goods to and from certain selected areas with a view to promoting growth of industries there:-
1. Short title - This Scheme may be called the Transport Subsidy Scheme, 1971.
(a) ‘Industrial Unit’ means and industrial unit where a manufacturing programme is carried on.
(b) ‘New Industrial Unit’ means an industrial unit which has set up manufacturing capacity and come into production on or after the date of commencement of the Scheme.
(c) ‘Existing Industrial Unit’ means an industrial unit which has set up manufacturing capacity and came into production before the date of commencement of the Scheme.
(d) ‘Substantial expansion’ means increase in production of an industrial unit by 25 per cent or more of the licenced or approved capacity.
(e) ‘Diversification’ means manufacture of new article or articles by an industrial units by 25 per cent or more (by value) of the approved or licensed capacity of the article or articles already manufactured by it during the preceding year.
@ Amended vide Notification No. 11(1)/95-DBA.II dated 28.07.93 dated 29.09.1995 and No. 11(1)/98-DBA.II dated 29.01.1998.
(f)** The Selected Areas (A) means the State of Jammu & Kashmir and the North-Eastern Region comprising the States of Assam, Meghalaya, Manipur, Nagaland and Tripura and the Union Territories of Arunachal Pradesh and Mizoram, the Selected Areas (B) means the State of Himachal Pradesh and Hilly areas of Uttar Pradesh State comprising the districts of Dehradun, Nainital, Almora, Pauri Garhwal, Tehri Garhwal, Pithorgarh, Uttar Kashi and Chamoli, the Selected Areas (C) means the Union Territories of Andaman & Nicobar Islands and Lakshadweep and the Selected Areas (D) means the State of Sikkim.
g. %
(h) ‘Raw Material’ means any raw material actually required and used by an industrial unit in its manufacturing porogramme as approved by the Government of India and/or by the Government of State/Union Territory in which the industrial unit is located.
(i) ‘Finished Goods’ means the goods actually produced by an industrial unit in accordance with the manufacturing programme approved by the Government of India and/or the Government of State/Union Territory in which the industrial unit is located.
(ii) @ Industrial units will not be eligible for the transport subsidy for internal movement of raw materials and finished goods within the State of Jammu & Kashmir, the North-Eastern Region, the State of Himachal Pradesh, the hilly areas of Uttar Pradesh, the Union Territories of Andaman & Nicobar Islands and Lakshadweep and the State of Sikkim.
(iii) @ In the case of Jammu & Kashmir, transport subsidy will be given on transport costs between the location of the industrial unit and rail head of Jammu or Pathankot, whichever is nearer.
In the case of Himachal Pradesh, the transport subsidy will be given on transport costs between the location of the industrial unit in the States and the nearest rail-head viz. (i) Pathankot, (ii) Kiratpur Sahib, (iii) Nangal, (iv) Kalka, (v) Ghanauli, (vi) Yamuna Nagar, (vii) Barara and (viii) Hoshiarpur.
In the case of hilly areas of Uttar Pradesh State, the transport subsidy will be given on the transport costs between the location of the industrial unit and the nearest rail-head viz., (I) Dehradun, (ii) Rishikesh, (iii) Moradabad, (iv) Bareilly, (v) Kotdwara, (vi) Shahajanhanpur and (vii) Rampur.
** Amended vide Notification No. 6/3/75-RD dated 19.07.1978.
@ Amended vide Notification No. F.6(26)/71-IC dated 28.02.1974 and No. 6/3/75-RD dated 19.07.1978.
% Deleted vide Notification No. 6(26)/74-IC dated 28.02.1974.
(iv)* In the case of North-Eastern region comprising the States of Assam, Meghalaya, Nagaland, Manipur, Tripura and the Union Territories of Arunachal Pradesh and Mizoram the transport subsidy will be given on the transport costs between Siliguri and the location of the industrial unit in these States/Union Territories. While calculating the transport costs of raw materials the cost of movement by rail from Siliguri to the railway station nearest to the location of the industrial unit and thereafter the cost of movement by road to the location of the industrial unit will be taken into account. Similarly, while calculating the transport costs of finished goods the costs of movement by road from the location of industrial unit to the nearest railway station and thereafter the cost of movement by rail to Siliguri will be taken into account. In the case of North-Eastern region, for raw materials moving entirely by road or other mode of transport the transport costs will be limited to the amount which the industrial unit might have paid had the raw materials moved from Siliguri by rail upto the railway station nearest to the location of the industrial unit and thereafter by road. Similarly, in the case of movement of finished goods moving entirely by road or other mode of transport in the North Eastern region, the transport costs will be limited to the amount which the industrial unit might have paid had the finished goods moved from the location of the industrial units to the nearest railway station by road and thereafter by rail to Siliguri.
(v) & In the case of Andaman & Nicobar Islands, the transport subsidy will be given on transport costs by sea and road between Madras Port and the location of the industrial unit in the Union Territory. In the case of Lakshadweep, the transport subsidy will be given on transport costs by sea and road between Cochin Port and the location of the industrial unit in the Union Territory. If any other port on the mainland is used for the purpose of transport subsidy, the transport costs will be taken at the industrial unit would have incurred had Madras or Cochin Port, as the case may be, been used, or the actual transport costs, whichever are less.
(vi) & In the case of Sikkim, the transport subsidy will be given on transport costs between the location of the industrial unit in the State and the rail head of Siliguri.
(vii) + Freight charges for movement by road/sea will be determined on the basis of transport/transshipment rates fixed by the Central Government/State Government/Union Territory Administration concerned from time to time or the actual freight paid, whichever is less.
(viii) $ Cost of loading or unloading and other handlings charges such as from railway station to the site of the industrial unit will not be taken into account for the purpose of determining transport costs.
& Inserted vide Notification No. 6/3/75-RD dated 19.07.1978.
* Amended vide Notification No. F. 6(26)/71-IC dated 28.02.1974.
+ Renumbered and amended vide Notification No. 6/3/75-RD dated 19.07.1978.
$ Renumbered vide Notification No. 6/3/75-RDM dated 19.07.1978.
(ix)$ All new industrial units located in the selected areas will be eligible for transport subsidy equivalent to 50 per cent of the transport costs of both raw materials as well as finished goods.
(x)$ Existing industrial units in the selected areas are also eligible for transport subsidy in respect of the additional transport costs of raw materials and finished goods arising as a result of substantial expansion or diversification effect by them after the commencement of the Scheme. Transport Subsidy in such cases will be restricted to 50 per cent of the transport costs of the additional raw materials required and finished goods produced as a result of the substantial expansion or diversification.
(xi)+ Transport Subsidy will also cover 50 per cent of the transport charges for movement of steel from Gauhati stockyard of M/s Hindustan Steel Ltd. to the site of the industrial units in the North-Eastern region and for movement of industrial raw materials from the State Corporation’s depots situated in the hill districts of Uttar Pradesh to the sites of the industrial units located in the hill districts of the State.
(xii)*$ The State Govt./Union Territory Admn. will set up a Committee consisting of the Director of Industries, a representative each of the State Industries Department and the State Finance Deptt. etc. on which a representative of the Ministry of Industrial Development will also be nominated. The Committee will operate at the State/Union Territory level and scrutinize and settle all claims of transport subsidy arising in the State/Union Territory. The claimants should be asked to provide proof of raw material, ‘imported’ into and finished goods ‘exported’ out of the selected States/Union Territory/areas where the unit is situated from the registered Chartered Accountants. The Committee may also lay down the production of any other documents which in their opinion is necessary to decide the eligibility of claimant for the transport subsidy. However, in the case of small units with a capital investment of Rs. 1 lakh or less the requirement of production of certificate from Chartered Accountant may be waived subject to the condition that such claims are properly verified by the State Government authorities before the subsidy is sanctioned/disbursed. After having scrutinized and settled the claims, the amount disbursed to industrial unit should first be adjusted against the outstanding ways and means of advances made to the State Government/Union Territory Administration for Centrally Sponsored Scheme in accordance with the procedure outlined in the Ministry of Finance letter No. 2(17)/PII/58 dated 12.05.1958 and the balance, if any, shall be paid in cash to the State Govt./Union Territory Administration.
Provided that in the case of small units with a capital investment of Rs. 1,00,000 and less, the requirement of production of proof of import of raw material and export of finished products from registered Chartered Accountant will be substituted by a appropriate verification by the State Govt. authorities.
(xiii)$ In order to check any misuse of transport subsidy Directorate of Industries in the State/Union Territories will carry out periodical checks to ensure that the raw materials and the finished goods in respect of which transport subsidy has been given were actually used for the purpose by a system of scrutinising of consumption of the raw materials and the output of the finished goods.
$ Renumbered vide Notification No. 6/3/75-RDM dated 19.07.1978.
(xiv)$ Directorate of Industries of the State and Union Territories concerned will draw up procedures and arrangements not only for scrutinising the claims for transport subsidy but also arrange for prompt payment of the claims. The number of transport subsidy claims that may be preferred by an industrial unit should not ordinarily exceed one in a quarter. However, the Director of Industries may at his discretion entertain more number of claims in a financial year, if the financial position of the industrial unit so warrants.
(xv)$ Directorates of Industries of the States and Union Territories concerned will lay down a system of pre-registration of the industrial units which are eligible for transport subsidy. At the time of registration the Directorate of Industries will fix and indicate the capacity of such units. They will also lay down procedure to ensure regular inflow of information regarding the movement of raw material and finished goods to and from the industrial units. The Directorate of Industries of the States and Union Territories should also lay down that statistics of production and utilization of raw materials should be maintained and kept open for inspection on request by the Directorate of Industries.
(xvi)$ The Ministry of Industrial Development will continuously review the arrangements made by the Directorate of Industries of the concerned States and Union Territories and suggest modifications in the procedure for scrutinizing the claim, payment of transport subsidy etc.
(xvii)$ Notwithstanding the provisions of the Scheme Government of India and/or the Govt. State/Union Territory concerned have full discretion to refused to entertain or reject any claim for transport subsidy.
(xviii)$ Any false statement made deliberately by an industrial unit or any mis-representation of facts by it will disqualify it from the grant of transport subsidy for such period of time as the Government of India and/or the Government of State/Union Territory concerned may decide after giving a reasonable opportunity to the industrial unit to State its case.
$ Renumbered vide Notification No. 6/3/75-RDM dated 19.07.1978.
