Industrial Development Policy
FCI Subsidy Versus Net SGST Reimbursement
Two routes, one irrevocable election. How to compare them for a specific unit.
IDP 2024-30 gives an eligible unit a choice between a Fixed Capital Investment subsidy and Net SGST reimbursement. The two are alternatives. The election is made by affidavit and cannot be reversed, so the comparison has to be done properly before the unit commits.
What each route is
The FCI subsidy is a grant calculated as a percentage of eligible fixed capital investment, subject to a ceiling and paid over a period. It depends on what the unit invests and how well that investment is evidenced. Net SGST reimbursement returns the state GST the unit actually pays in cash on eligible sales over a period. It depends on the unit's sales pattern.
Why the headline percentage misleads
Net SGST is reimbursed only on state GST paid in cash on in-state final-consumption sales, through a separate registration, after input credit. A B2B manufacturer selling to other registered businesses, or selling out of state, pays little SGST in cash and would receive little. For such units the FCI route is usually the only realistic one. A consumer-facing unit with substantial in-state retail sales is the case where the SGST route deserves a year-wise model.
How we compare
We build a year-wise projection of eligible investment and the FCI grant on one side, and of taxable in-state sales, input credit and cash SGST on the other, over the respective periods, and discount both. The comparison is presented with the assumptions visible, so the promoter understands what would have to be true for each route to win.
The decision is permanent
Because the election is irrevocable, we recommend that the promoter sign the affidavit only after reading the comparison and, where there is doubt, after written confirmation from DTIC on any point of interpretation.
Official references
Official portals and notifications are the authority on current conditions. Links are provided for reference and may change.
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