Power tax sops, subsidy mark IT policy

Chief Minister Edappadi K Palaniswami on Monday released the Information and Communication Technology (ICT) Policy, 2018, which provides investors huge incentives in the form of capital subsidy and electricity tax exemption if power is purchased from Tangedco.

“I believe that this policy will address the aspiration of investors, especially those in the IT and ITES sector, MSMEs, start-ups by way of providing standard administrative incentives, fiscal incentives, capital subsidies, tax exemption, special incentives. Further, it also has provisions for incubating start-ups and creation of research parks,” said Palaniswami, after releasing the policy at the Secretariat. 

The government is set to award various incentives for IT companies investing in the State. Irrespective of the location of the project, new or expansion units will be given a back-ended capital subsidy and electricity tax exemption on power purchased from the State-owned utility.

The electricity tax exemption varies between two and five years based on the investment. The capital subsidy also varies from Rs 30 lakh to Rs 1.5 crore based on the investment of the project. 

For the first time, the State has been divided into three zones for the provision of incentives and employment criteria. Chennai, Tiruvallur and Kancheepuram districts have been grouped under category A, nine southern districts from Dindigul to Kanniyakumari were grouped under category C, while the remaining 20 districts have been grouped under category B. 

The investment range, number of employees and the time-line for achieving the target for all the three categories have also been mentioned. 

However, the IT companies operating in Chennai and its neighbouring districts, coming under category A, have been given higher incentives when compared to those in the other regions.

 IT/ITES units located in ELCOT in category A districts will be provided an additional capital subsidy of 50 percentage above the eligible limit, while the IT/ITES units located in category B and C districts will only receive 10 and 25 percentage additional capital subsidy above the eligible limit. 

However, firms coming up in category B and C districts will get special incentives for setting up sewerage treatment and reverse osmosis plants.