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Jute Manufactures Development Council - Ministry of Textiles

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JUTE MANUFACTURES DEVELOPMENT COUNCIL<br />

INCENTIVE SCHEME FOR MODERNISATION OF JUTE INDUSTRY<br />

1. Short Title :<br />

The Scheme may be called, the <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> (JMDC)<br />

Incentive Scheme for Modernisation <strong>of</strong> <strong>Jute</strong> Industry.<br />

2. Objective :<br />

The objective <strong>of</strong> the scheme is to facilitate modernisation and upgradation <strong>of</strong><br />

technology in jute mills.<br />

3. Commencement and Duration :<br />

The scheme will come into effect on and from a date to be notified by the <strong>Jute</strong><br />

<strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> and shall remain valid initially for a period <strong>of</strong> three<br />

years. However, the tenure <strong>of</strong> the scheme is subject to annual review by the <strong>Council</strong> <strong>of</strong><br />

the JMDC.<br />

4. Definitions :<br />

i) “<strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong>” means <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong><br />

<strong>Council</strong> constituted under the <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> Act, 1983.<br />

ii) “<strong>Jute</strong> Commissioner” means the incumbent holding the post <strong>of</strong> <strong>Jute</strong> Commissioner.<br />

iii) “<strong>Jute</strong> <strong>Manufactures</strong>” means <strong>Jute</strong> <strong>Manufactures</strong> as defined in the <strong>Jute</strong> <strong>Manufactures</strong><br />

Cess Act 1983.<br />

iv) “<strong>Jute</strong> Mill” means ‘producer’ <strong>of</strong> <strong>Jute</strong> <strong>Manufactures</strong> as defined in the <strong>Jute</strong><br />

<strong>Manufactures</strong> Cess Act 1983.<br />

v) “IJIRA” means Indian <strong>Jute</strong> Industries Research Association located at 17 Taratola<br />

Road, Kolkata – 700 088<br />

vi) “IJMA” means Indian <strong>Jute</strong> Mills Association located at 6 N.S. Road, Kolkata – 700<br />

001<br />

5. Operating Agency :<br />

The scheme will be operated by <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong>,<br />

Kolkata.<br />

6. Eligibility Criteria :<br />

All jute mills, who pay statutory cess on manufacture <strong>of</strong> jute goods and submit to<br />

JMDC returns on payment <strong>of</strong> cess will be eligible to receive subsidy under the scheme<br />

provided that the modernization and upgradation is carried out subsequent to the date <strong>of</strong><br />

notification <strong>of</strong> the scheme.<br />

7. Types <strong>of</strong> Machinery / Equipment / Ancillary Items Eligible for Subsidy :<br />

(i) All items <strong>of</strong> machinery identified under the Technology Upgradation Fund<br />

Scheme (TUFS) from time to time;


(ii) Other items <strong>of</strong> machinery including stand-alone units, not covered under sub-clause<br />

(i) above may be approved by the Empowered Committee and notified by JMDC for the<br />

purpose <strong>of</strong> this scheme from time to time;<br />

(iii) Energy saving equipment in the manufacturing process.<br />

(iv) Equipment utilizing non conventional energy – solar power and mill waste – which<br />

provide a supplementary source <strong>of</strong> power and facilitate energy savings;<br />

will be eligible for subsidy under the scheme, provided that such machinery and<br />

equipment – except those second hand machinery allowed for import under TUF scheme<br />

– are new.<br />

8. Subsidy for Modernisation :<br />

i) All eligible jute mills under the scheme will be entitled to get subsidy for procurement<br />

<strong>of</strong> the eligible items mentioned in Clause 7(i) to 7 (iv) above, for modernisation and<br />

upgradation, on making an application in a format prescribed for the purpose. The<br />

subsidy shall be restricted to 15% <strong>of</strong> the cost <strong>of</strong> machinery/equipment procured by the<br />

<strong>Jute</strong> Mills.<br />

ii) The subsidy will be Payable only in Rupees in India. The amount will be released after<br />

the jute mill installs the eligible machinery and certifies its operation. The eligible<br />

machinery may be purchased from out <strong>of</strong> the loan <strong>of</strong> any financial institution / bank /<br />

leasing company or from the available resources <strong>of</strong> the jute mill.<br />

9. Conditions for Grant <strong>of</strong> Subsidy :<br />

Grant <strong>of</strong> subsidy under the scheme is subject to the following conditions:<br />

i) When any jute mill acquires and installs in its declared premises the eligible machinery<br />

for upgradation and/or modernisation from its own resources,<br />

(a) Such acquisition and/or installation shall be preceded by an intimation to JMDC in<br />

writing about the intention for such up-gradation and / or modernisation along with the<br />

scheme. JMDC will involve IJIRA or any other technical institution, as considered<br />

appropriate by the Empowered Committee for technical appraisal. In principle decision<br />

for eligibility <strong>of</strong> the scheme for subsidy will be intimated by JMDC within 30 days from<br />

the date <strong>of</strong> receipt <strong>of</strong> such an intimation.<br />

(b) Such acquisition has to be made from a list <strong>of</strong> vendors approved by the Empowered<br />

Committee in consultation with IJMA / IJIRA. The Empowered Committee as defined in<br />

clause 12 may include and delete the names <strong>of</strong> the vendors from the said list as and when<br />

deemed necessary.<br />

ii)A jute mill may acquire and install in its declared premises the eligible<br />

machinery/equipment for upgradation and/or modernization from any source as permitted<br />

by the financial institution / bank / lease company.<br />

iii) A <strong>Jute</strong> Mill receiving subsidy under clause 8 above shall not be eligible to claim<br />

assistance under the TUF scheme or from any scheme <strong>of</strong> the MOT for the same<br />

equipment / machinery. Similarly, any beneficiary under the TUF scheme or from any<br />

scheme <strong>of</strong> the MOT will not be eligible for availing subsidy under this scheme for the<br />

same equipment / machinery.<br />

iv) The jute mill will not be allowed to dispose <strong>of</strong> the items for which subsidy has been<br />

disbursed within a period <strong>of</strong> 5 years from the date <strong>of</strong> receipt <strong>of</strong> subsidy except with the<br />

prior approval <strong>of</strong> JMDC.<br />

v) In case it is found that the subsidy has been availed <strong>of</strong> on the basis <strong>of</strong> any false<br />

information, the company shall be liable to refund to JMDC the subsidy availed <strong>of</strong> along


with interest to be charged from the date <strong>of</strong> disbursal to the date <strong>of</strong> refund. The rate <strong>of</strong><br />

interest shall be the prime lending rate <strong>of</strong> JMDC’s banker at the time <strong>of</strong> invoking this<br />

penal clause.<br />

10. Procedure for Applying for Subsidy :<br />

i) The jute mill company will make an application for subsidy, in the prescribed format<br />

along with the scheme for up-gradation and / or modernisation duly appraised by the<br />

financial institution, alongwith necessary documents in support <strong>of</strong> the loan or such<br />

documents as required by JMDC. This procedure will be followed if the machinery for<br />

upgradation / modernization is purchased from a sanctioned loan <strong>of</strong> any financial<br />

institution / bank / leasing company.<br />

ii)In case a jute mill acquires and installs machinery and/or equipment for up-gradation<br />

and/ or for modernisation, from its own resources, the <strong>Jute</strong> Mill will make an application<br />

for subsidy in the prescribed format. Pro<strong>of</strong> <strong>of</strong> the installation and / or acquisition <strong>of</strong><br />

machinery and other documents that may be required by JMDC will be provided by the<br />

jute mill. Such acquisition and installation will be inspected by <strong>Jute</strong> <strong>Manufactures</strong><br />

<strong>Development</strong> <strong>Council</strong> or its duly authorized representative or the Directorate <strong>of</strong><br />

Industries <strong>of</strong> the respective State Govt. or IJIRA or any other agency to be decided by the<br />

Empowered Committee.<br />

iii) JMDC shall settle such claims within 30 days <strong>of</strong> the receipt <strong>of</strong> the same. JMDC shall<br />

notify such additional procedural guidelines as and whenever required.<br />

11. Funding :<br />

<strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> shall from its own budget allocate annually<br />

such amount as may be deemed necessary for the scheme every year.<br />

12. Committee :<br />

An Empowered Committee, the composition <strong>of</strong> which is given below, will look into all<br />

aspects <strong>of</strong> the scheme including advising JMDC on the modus operandi and on<br />

implementation <strong>of</strong> the scheme.<br />

• <strong>Jute</strong> Commissioner – in the chair<br />

• Secretary, JMDC – convenor<br />

• Two representatives <strong>of</strong> <strong>Ministry</strong> <strong>of</strong> <strong>Textiles</strong><br />

• Director, IJIRA, Kolkata<br />

• Director, CRIJAF, Kolkata<br />

• Any 3 members representing industry to be selected by Chairman, JMDC.<br />

EMA Scheme Extended by GoI >><br />

The External Market Assistance (EMA) Scheme operatedby JMDC has been extended by the Central Government for a<br />

further period <strong>of</strong> one year w.e.f. 01-04-2003 on the following items at rates indicated against them :


Sl.<br />

Rate <strong>of</strong> EMA on FOB Value<br />

Category<br />

No. Realisation<br />

1 <strong>Jute</strong> or jute blended/ union fabrics<br />

5%<br />

(subject to a cap <strong>of</strong><br />

Rs. 5000/tonne)<br />

(FOB above Rs. 50000/tonne)<br />

2 <strong>Jute</strong>/blended/union carpets/ mats/ matting 5%<br />

3 <strong>Jute</strong> handicrafts 5%<br />

4 <strong>Jute</strong> wall-hangings 5%<br />

5 <strong>Jute</strong> or jute blended garments and made ups 5%<br />

6 Food grade jute products 5%<br />

7 Geo-textiles 10%<br />

8 <strong>Jute</strong> Yarn, jute twine and value added hessian cloth and jute or jute<br />

7%<br />

blended/ union fabrics (FOB above Rs. 50000/tonne except for jute<br />

yarn and jute twine) exported by 100% EOUs<br />

The benefit under Sl. No. 8 will, however, not be in addition to the eligibility criteria in respect <strong>of</strong> products mentioned<br />

against Sl. No. 1. An additional 5% EMA shall be made available on Food Grade <strong>Jute</strong> Products ( including Cloth) exported<br />

to 71 enlisted Latin/Central American and African countries. The EMA would also be available on jute geotextiles, hessian<br />

and sacking made-ups in addition to DEPB benefits admissible on these items.<br />

< Top ><br />

JMDC Incentive Scheme for Mordernisation <strong>of</strong> <strong>Jute</strong> Industry Amended >><br />

By a letter dated 19th September, 2003, the Union <strong>Ministry</strong> <strong>of</strong> <strong>Textiles</strong> conveyed its approval to the following<br />

amendments in the scheme :<br />

a) The "Objective" <strong>of</strong> the Scheme has been amended so as to facilitate induction <strong>of</strong> modern technology in new jute mills<br />

to be set up in jute growing areas, in addition to modernisation and upgradation <strong>of</strong> technology in existing jute mills as<br />

originally envisaged.<br />

b) The "eligibility criteria" has been amended by providing for grant <strong>of</strong> a higher subsidy @20% <strong>of</strong> the cost <strong>of</strong> machinery (<br />

in place <strong>of</strong> normal rate <strong>of</strong> 15%) in respect <strong>of</strong> new modern jute mills set up in new locations in jute growing areas having<br />

inadequate jute processing facilities, but only after such mills pay cess for at least 3 months on products manufatured by<br />

them.<br />

DutyEntitlementPass Book (DEPB) Scheme.<br />

On the recommendation and follow-up by JMDC, the Director General <strong>of</strong> Foreign Trade<br />

(DGFT) under <strong>Ministry</strong> <strong>of</strong> Commerce & Industry has extended the benefits under DEPB<br />

Scheme to major jute products,viz. <strong>Jute</strong> Soil Saver, <strong>Jute</strong> Yarn/Twine, Hessian cloth &<br />

Hessian made-up and Sacking cloth & Sacking made-up with effect from 9 th July 2002.


The DEPB rates applicable to the major jute products with effect from 1 st April, 2003 are<br />

as follows :<br />

Product Group : Miscellaneous Product Code : 90<br />

S.No. Description DEPB Rate<br />

%<br />

24. <strong>Jute</strong> Soil Saver 5.00<br />

25. <strong>Jute</strong> Yarn / <strong>Jute</strong> Twine 5.00<br />

26. aHessian cloth<br />

7.00<br />

bHessian made-up<br />

7.00<br />

27. aSacking cloth<br />

10.00<br />

bSacking made-up<br />

10.00<br />

Value cap for<br />

DEPB entitlement<br />

Rs.40/Kg<br />

Rs.55/Kg<br />

Rs.30/Kg<br />

Rs.40/Kg<br />

Product Group : Plastics Product Code : 63<br />

Sl.No. Description DEPB Rate<br />

%<br />

Value cap for<br />

DEPB<br />

entitlement<br />

34. Hessian Bags with LDPE/HDPE/PP 8.00 Rs.175/Kg<br />

liner/Lamination and with/without<br />

Zipper/Handle<br />

37. <strong>Jute</strong> Bags with HDPE<br />

liner/ LDPEliner/ Lamination<br />

with/without Zipper/Handle<br />

8.00 Rs.175/Kg.<br />

With introduction <strong>of</strong> DEPB scheme with effect from 9 th July, 2002 export<br />

performance <strong>of</strong> these exportable items during July’02 - March’03 have been shown<br />

below. Export during July’01-March’02 from same source is also shown alongside for<br />

comparison.<br />

Qty.:<br />

000’M.Ton<br />

Value<br />

:Rs./Million


July’02-March’03 July’01-March’02<br />

Product Qty. Value Qty. Value<br />

% increase<br />

(+) or decrease<br />

(-) over<br />

July-Mar.’01<br />

Hessian 67.0 2342.92 27.0 957.39 (+) 145%<br />

Sacking 36.4 1245.58 11.5 385.62 (+) 223%<br />

Yarn 71.3 2049.72 61.3 1759.49 (+) 16%<br />

Export <strong>of</strong> All <strong>Jute</strong><br />

goods<br />

196.9 7854.30 113.7 4426.29 (+) 77%<br />

It reveals from the above table that after introduction <strong>of</strong> DEPB, export<br />

performance <strong>of</strong> eligible items <strong>of</strong> jute products has shown a steep increasing trend as<br />

compared to corresponding period <strong>of</strong> previous year. While export <strong>of</strong> hessian has<br />

registered an increasing trend by 145 per cent, sacking and yarn have increased by 223<br />

per cent and 16 per cent respectively. Moreover, this upward trend in export is mainly<br />

attributable to DEPB coupled with grant <strong>of</strong> support under EMA to various diversified jute<br />

products which made export prices <strong>of</strong> jute goods quite competitive in world markets and<br />

contributed to a healthy increase in exports.<br />

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