dipp.gov.in Transport Subsidy Scheme : Department of Industrial Policy & Promotion

Organisation : Department of Industrial Policy & Promotion
Scheme Name : Transport Subsidy Scheme
Applicable For : North Eastern Region, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Andaman & Nicobar Administration
Website : http://dipp.gov.in/programmes-and-schemes/himalayan-north-eastern/transport-subsidy-scheme

Transport Subsidy Scheme :

Government of India had introduced Transport Subsidy Scheme (TSS) on 23.7.1971 to develop industrialization in the remote, hilly and inaccessible areas.

Related : DIPP Industrial Park Scheme : www.statusin.in/1653.html

The scheme was applicable to all industrial units (barring plantations, refineries and power generating units both in public and private sectors irrespective of their size).

Under the scheme, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production.

For North Eastern states, subsidy is 90%. However, for the movement of goods within NER, the subsidy is 50% on finished goods and 90% on raw material. TSS was modified and notified as “Freight Subsidy Scheme (FSS) – 2013, w.e.f. 22.1.2013 for a period of five years.

The Scheme has been discontinued with effect from 22.11.2016. However, industrial units registered under the scheme prior to the date of issue of DIPP’s notification dated 22.11.2016 will be eligible for the benefits of the residual period under the scheme.

Scheme Objectives : – to develop industrialization in the remote, hilly and inaccessible areas in 8 States of North Eastern Region, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Andaman & Nicobar Administration, Lakshadweep Administration and Darjeeling District of West Bengal.

Coverage and eligibility : – FSS covers 8 States of North Eastern Region, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Andaman & Nicobar Administration, Lakshadweep Administration and Darjeeling District of West Bengal.

TSS is applicable to all industrial units (barring Plantations, Fly Ash, Refineries, Power generating units, Coke, including Calcined Petroleum Coke industry and the units producing tobacco and manufactured tobacco substitutes, pan masala and plastic carry bags of less than 20 microns), both in public and private sectors irrespective of their size.

Under the scheme, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production.

For North Eastern states, J&K and UTs, subsidy is 90%. For HP, Uttarakhand and Darjeeling Districts of West Bengal it is 75% of transport cost. However, for the movement of goods within NER, the subsidy is 50% on finished goods and 90% on raw material.

Budget Availability / utilization since last five years : – The budget allocation for TSS/FSS for the 12th Five year plan is Rs.500 crores, however, Rs.678.39 crore (including Rs.70 crore allocated at BE 2016-17) has already been released till 29.03.2017.

Physical Progress against milestones till the end of 2015-16 : – Since under TSS/FSS, subsidy on eligible transport cost of raw material and finished goods are given based on the actual quantity of transportation, the physical progress under the schemes cannot be quantified.

Salient features of the Policy : Under the schemes, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production.

For North Eastern states, J&K and UTs, subsidy is 90%. For HP, Uttarakhand and Darjeeling Districts of West Bengal it is 75% of transport cost. However, for the movement of goods within NER, the subsidy is 50% on finished goods and 90% on raw material. Details in this regard is as under:

North Eastern Region :
** Movement of raw material – 90% of eligible transportation cost
** Movement of finished Goods – 50% of eligible transportation cost within NER and 90% of eligible transportation cost for other areas

** Movement by air of electronic components – 75% of eligible transportation cost of air freight from Kolkata to nearest airport plus 90% of eligible transportation cost by rail/road
** Movement by inland waterways – 90% of eligible transportation cost

Sikkim and Jammu & Kashmir :
** Movement of raw material/finished goods – 90% of eligible transportation cost

** Movement by air of electronic components in J&K – 75% of eligible transportation cost of air flight from Delhi to nearest airport plus 90% of eligible transportation cost by rail/road

A&N Islands and Lakshadweep :
** Movement of raw material/finished goods – 90% of eligible transportation cost from Chennai/Cochin (sea & road)

Himachal Pradesh, Uttarakhand and Darjeeling : (West Bengal)
** Movement of raw material/finished goods – 90% of eligible transportation cost

** Movement by air of electronic components – 75% of eligible transportation cost of air freight from Delhi to nearest airport plus 75% of eligible transportation cost by rail/road.