Home India Ministry of Heavy Industries Guidelines for the Production Linked Incentive (PLI) Scheme ...
Date: 31-Aug-2023 Category: Extra Ordinary State: Union Government Country: India

Guidelines for the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component

Issued by Ministry of Heavy Industries · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The gazette notification provides amendments to the Scheme Guidelines for the Production Linked Incentive (PLI) scheme for the Automobile and Auto Component industry. These amendments pertain to the definition and calculation of 'Domestic Value Addition' and introduce clarifications regarding Frequently Asked Questions (FAQs), Weighted Average Discount, and Non-Originating Material and Services.

Key Changes

  • Amendment to the definition of 'Domestic Value Addition' (Para 2.26): The term is now explicitly defined as the percentage of manufacturing activity undertaken in a specific part of the supply chain and will be certified by the Testing agency of the Ministry of Heavy Industries (MHI).
  • The formula for calculating Domestic Value Addition is provided: % Domestic Value Addition = [{Adjusted Ex-factory price of the product – (minus) Adjusted Import content} / Adjusted Ex-factory price of the product] x 100.
  • Definitions for 'Adjusted Ex-factory price of the product' and 'Adjusted Import content' are provided, including deductions for Total Exempted Import as per FAQs and Weighted Average Discount in excess of the dealer/ channel margin.
  • Clarification that CIF means Cost, Insurance, and Freight.
  • Introduction of Para 2.28 defining 'Frequently Asked Questions (FAQs)': FAQs are defined as queries raised during interactions with applicants and auto industry associations, compiled, and published by the Ministry of Heavy Industries (MHI) from time to time.
  • Introduction of Para 2.29 defining 'Weighted Average Discount': It is defined as the weighted average of discounts offered by applicants on the AAT (presumably Automobile and Auto component) product to their dealers/distributors in the last 12 months.
  • Introduction of Para 2.30 defining 'Non-Originating Material and Services': These are defined as materials and services whose country of origin is different from the country where they are used in manufacturing, or whose origin cannot be determined.
  • All calculations related to Domestic Value Addition are net of GST.

Impact Analysis

Automobile and Auto Component Manufacturers

  • Action Items: Establish processes to determine and document the origin of all materials and services used in manufacturing.

Ministry of Heavy Industries (MHI)

  • Action Items: Monitor the implementation of the amended guidelines and address any challenges faced by the industry.

Auto Industry Associations

  • Action Items: Gather feedback from member companies on the impact of the amended guidelines and provide it to the Ministry of Heavy Industries.

Key Entities Referenced

Ministry of Heavy Industries (MHI): The government ministry responsible for administering the Production Linked Incentive (PLI) scheme for the Automobile and Auto Component industry. Testing agency of MHI: The agency designated by the Ministry of Heavy Industries to certify domestic value addition. Production Linked Incentive (PLI) scheme for Automobile and Auto Component industry: A government scheme designed to incentivize domestic manufacturing in the automobile and auto component sectors. S.O. No. 3947(E) dated 23rd September 2021: The original notification for the Scheme Guidelines for the Production Linked Incentive (PLI) scheme for Automobile and Auto Component industry, which this gazette notification amends.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-31082023-248462 CG-DxLx-xEG-I3D1H0x8x2x0 23-248462 xxxGIDExxx असाधारण EXTRAORDINARY भाग II—खण् ड 3—उप-खण्ड (ii) PART II—Section 3—Sub-section (ii) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 3696] नई दिल्ली, िरहस्ट्प जतवार, अगस्ट्त 31, 2023/भाद्र 9, 1945 No. 3696] NEW DELHI, THURSDAY, AUGUST 31, 2023/BHADRA 9, 1945 भारी उद्योग मत्रं ालय अजधसचू ना (सिं ोधन) नई दिल्ली, 31 अगस्ट्त, 2023 का.आ. 3857(अ).—ऑटोमोजिल और ऑटो संघटक उद्योग के जलए उत्पािन-सम्िद्ध प्रोत्साहन (पीएलआई) स्ट्कीम संिंधी दििाजनिेिों के आंजिक आिोधन म ें (जिसे भारी उद्योग मंत्रालय द्वारा दिनांक 23 जसतंिर 2021 को सां.आ. संख्या 3947 (अ.) द्वारा अजधसूजचत दकया गया था), जनम्नजलजखत संिोधन सरकारी रािपत्र म ें इसके प्रकािन की तारीख से प्रभावी दकए िाते ह:ैं- उप-पैरा 2.26 का संिोधन को जनम्नानुसार पढा िाएगा: पैरा 2.26 : घरेल ू मल्ू य सवं धनध : "घरेलू मल्ू य संवधधन" िब्ि का अथध आपूर्त ध श्रंखला के उस जनर्िष्टध भाग म ें की िा रही जवजनमाधण गजतजवजध के प्रजतित के रूप म ें लगाया िाएगा। इस े भारी उद्योग मंत्रालय की परीक्षण एिेंसी द्वारा प्रमाजणत दकया िाएगा। % घरेलू मूल्य संवधनध =[{उत्पाि का एक्स फैक्टरी समायोजित मूल्य -(माइनस) समायोजित आयात सामग्री}/ उत्पाि का समायोजित एक्स-फैक्री मूल्य]x100 जिसम ें एक्स-फैक्री मूल्य का अथध अनुप्रयोज्य करों स े पूव,ध फैक्री गेट पर उत्पाि के मल्ू य स े ह।ै सीआईएफ का अथध लागत, िीमा और माल ढुलाई स े होगा। 5593 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] उत्पाि का समायोजित एक्स-फैक्री मूल्य = उत्पाि का एक्स-फैक्री मूल्य - (घटाव) िहुधा पछू े िान े वाल े प्रश्न (एफएक्यू) के अनुसार कुल छूट-प्राप्त आयात - (घटाव) डीलर/चनै ल मार्िधन के अजतररक्त भाररत औसत छूट। समायोजित आयात सामग्री = आयात सामग्री अथाधत ् गैर-ऋण योग्य आयात िुल्कों - (घटाव) िहुधा पूछे िान े वाले प्रश्नों के अनुसार कुल छूट-प्राप्त आयात सजहत अंजतम उत्पाि म ें रॉयल्टी सजहत सभी गरै -मूल सामग्री और सेवाओं के सीआईएफ मूल्य का योग। उपयक्तुध परू ी गणना िीएसटी का जनवल ह।ै उप-पैराग्राफ 2.27 के पश्चात,् उप-पैराग्राफ 2.28, 2.29 और 2.30 िोडे िाएंग,े नामत : - पैरा 2.28 : िहुधा पछू े िान ेवाल े प्रश्न (एफ़एक्य)ू : िहुधा पछू े िान े वाले प्रश्न आवेिकों और ऑटो उद्योग संघों के साथ चचा/ध जहतधारक परामि ध के िौरान उठाए गए प्रश्न होत े ह।ैं इन प्रश्नों को इस स्ट्कीम म ें िहुधा पछू े िान े वाल े प्रश्नों के रूप म ेंसंकजलत दकया गया ह ैऔर भारी उद्योग मंत्रालय द्वारा समय-समय पर प्रकाजित दकया गए ह।ै पैरा 2.29 : भाररत औसत छूट: यह जपछले 12 महीनों म ें एएटी उत्पाि पर आवेिकों द्वारा अपन े डीलरों/जवतरकों को िी गई छूट का भाररत औसत ह।ै पैरा 2.30 : गरै -मलू सामग्री और सवे ाए:ं सामग्री और सेवाए ं जिनका उद्गम ििे उस ििे स े इतर ह ै जिसम ें उस सामग्री/सेवा का उपयोग जवजनमाधण म ें दकया िाता ह ै और कोई भी सामग्री/सेवा जिसका उद्गम जनधाधररत नहीं दकया िा सकता। [फा. स.ं 12(11)/2020-एईआई (21370)] हनीफ़ कुरैिी, संयक्ु त सजचव MINISTRY OF HEAVY INDUSTRIES NOTIFICATION (AMENDMENT) New Delhi, the 31st August, 2023 S.O. 3857(E).— In partial modification of the Scheme Guidelines for the Production Linked Incentive (PLI) scheme for Automobile and Auto Component industry which was notified by the Ministry of Heavy Industries vide S.O. No. 3947(E) dated 23rd September 2021, the following amendments are made with effect from date of its publication in the Official Gazette:- Amendment of sub-paragraph 2.26 to be read as under : Para 2.26 : Domestic Value Addition: The term “Domestic Value Addition” will be construed as the percentage of manufacturing activity being undertaken in that referred part of the supply chain. It will be certified by Testing agency of MHI. % Domestic Value Addition = [{Adjusted Ex-factory price of the product – (minus) Adjusted Import content} / Adjusted Ex-factory price of the product] x 100, where, Ex-Factory Price shall mean price of the product at the factory gate, before applicable taxes. CIF shall mean Cost, Insurance and Freight. Adjusted Ex-factory price of the product = Ex-factory price of the product - (minus) Total Exempted Import as per FAQs – (minus) Weighted Average Discount in excess of the dealer/ channel margin. Adjusted Import content = Import content i.e. sum of CIF value of all non-originating materials and services including royalty in the final product including non-creditable import duties - (minus) Total Exempted Import as per FAQs.[भाग II—खण् ड 3(ii)] भारत का रािपत्र : असाधारण 3 The entire calculation above is net of GST. After sub-paragraph 2.27, sub-paragraphs 2.28, 2.29 & 2.30 will be added, namely : Para 2.28 : Frequently Asked Questions (FAQs): FAQs are the queries raised during interactions/stakeholder consultations with applicants and auto industry associations. These queries have been compiled in the form of FAQs in this Scheme and published by MHI from time to time. Para 2.29 : Weighted Average Discount: It is the weighted average of discounts offered by the applicants on the AAT product to their dealers / distributors in the last 12 months. Para 2.30 : Non-Originating Material and Services: Material and Services whose country of origin is other than the country in which that material / service is used in manufacturing and any material / service whose origin cannot be determined. [F. No. 12(11)/2020-AEI (21370)] HANIF QURESHI, Jt. Secy. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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