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India By State - Jammu and Kashmir - Taxation & Legalities




Taxation & Legalities

Policies & Incentives

Vision and strategy

The aim of Jammu and Kashmir is taking initiatives and to progress the socio economic development of the state by making optimum use of the rich and abundant natural and human capital resources in the state.

This state is keen to promote employment opportunities in the industrial units and enhance conditions of approval for ant new industrial units.

The main elements to develop are:

  • To develop world-class infrastructure for rapid industrial development of the state.
  • To encourages private sector participation and provide the industries with incentives to promote privatisation.
  • To promote of environment friendly industries and providing incentives for upgrading the industrial technology to meet the environmental norms.

Industrial Policy & Incentives

The state develops modern industrial estates, growth centres ad integrated infrastructure development centres (IID).

  • Operational management of the major industrial estates will be rationalized, involving local industrialists through a suitable local self managed model both for development works and management of the estates including regulation of power and water supply
  • Treating private sector participation in infrastructure development as an industry for the purpose of availing incentives
  • Facilitation of acquisition of land by the State Government for such private sector initiatives
  • Efforts will be made to ensure that the power supply within industrial areas, estates, IIDCs, etc. is regular, reliable and of good quality
  • Private sector investment in generation and distribution of regular power supply in industrial areas, estates, IIDCs etc. will be actively encouraged
  • Micro-hydel projects are already open for private sector investment. A separate policy on the subject has been announced and implemented by the Power Development Department of the government

The capital incentive subsidy has been extended to the backward blocks of the state.

3% shall be payable on the working capital facilities available from the commercial banks to all existing units.

The Government has approved constitution of economic reconstruction agency as a society to develop infrastructure under externally aided projects. The money from the external sources will be routed to the agency from the Department of Economic Affairs and Ministry of Finance of the Government of India and it will assess and implement the projects independently.

IT Policy & Incentives

IT in Education encourages the use of information Technology in schools, colleges and educational institutions so as to enable to improve their skills, knowledge and job prospects and enable them to obtain employment in this sunrise industry.

The major policy initiatives consist to develop IT software and services for the purpose of incentives for the industry. IT software and services industry would be treated as industrial consumers and electricity tariff applicable to the industrial consumers would be levied on such industries.

The State Power Development Department would ensure good quality uninterrupted power supply to the IT units which are located in clusters/estates set up for this purpose.

The Government would encourage flow of investments including FDI and would provide full support wherever required.

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Doing Business in Jammu and Kashmir

Jammu & Kashmir State Industrial Development Corporation Ltd. (J&K SIDCO) is the nodal agency for promotion and development of medium and large-scale industries in the state. The corporation has actively promoted industrial ventures in the state since its inception and is thus playing the role of "Institutional Entrepreneur". Some of the key functions of the corporation are:

  • Identifies projects and obtains DOI/Registration from the Government wherever required.
  • Development of industrial infrastructure facilities
  • Undertakes project feasibility studies for various identified projects
  • Grant of financial assistance to industrial projects
  • Equity participation in selected joint/assisted sectors projects.

The Corporation has undertaken development of number of industrial estates; export promotion industrial park and industrial growth centres. The development of software Technology Park is also under implementation by it.

Approvals

Land Allotment Policy

The State government allocates land in the industrial estates and developed areas on long-term lease of 90 years on first come first served basis. However, entrepreneurs can choose the land if the requirement is large. A capital subsidy of 50 per cent will also be available at the time of availing of term loan for the construction work.

Power

The state gives priority to the industry while supplying it with quality power. The statute regulates the industrial power tariff, which are fairly attractive in the state. The industrial units are allowed to install their own captive power generation plants in the state and such units would be excluded from paying electricity duty. Besides, the state also gives subsidy for purchase of new diesel generating sets of 1 MW.

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Cost of setting up business in Jammu & Kashmir

An indicative table on cost of setting up business in J&K

Manufacturing

Land (US$ / hectare) 58,421
Labour Cost (US$ / man year worked) 2,279

Services

Occupation Costs
(US$ / sq ft / year)
16.8

Employee Cost (US$ / man year)

Software Developers 4,020
Team Leads 12,241
Architects 16,946
Project Managers 26,968

Common Heads

Cost of Capital
(Prime lending rate, per cent)
10.25 - 11.00
Electricity (US$ / 1000 KWh) 35.2

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More Information on Jammu and Kashmir

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