SPECS is a scheme which comes as a substitution of erstwhile Modified Special Incentive Package Scheme (MSIPS) intended to promote manufacturing of core electronic goods in India.
As compared to MSIPS, the product coverage under SPECS is limited to the core electronic components while the incentives under the scheme remains intact.
The more details of the scheme are as under:
Objective | •To strengthen the electronics manufacturing ecosystem in the country. •Attract large investments in the electronics value chain including electronic components and semiconductors. |
Tenure | 3 Years for Filing Applications, 5 Years for Investment |
Financial Outlay | Rs. 3,285 Crore |
Incentives | Financial Incentive of 25% on Capital Expenditure, on reimbursement basis |
Coverage | Electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods. (Electronics Products such as Mobiles and Consumer Goods excluded) |
Eligible Capex | Plant, Machinery, Equipment, Associated Utilities and Technology including R&D (Land and Building excluded) |
Minimum Investment Threshold | Ranges from INR 5 crore to 1,000 crore (Will encourage Domestic Players) |
ELIGIBILITY CRITERIA
- The scheme shall be applicable for investments in new units as well as expansion of capacity / modernization and / or diversification of existing units.
- If an application covers more than one product categories, then the minimum threshold of investment (capital expenditure) shall be the highest of the individual threshold investment for each of the product category(ies).
- The minimum investment thresholds are same for new units or expansion of capacity / modernization and / or diversification by existing units.
- A Project / Unit proposed may include multiple manufacturing facilities at one or more proposed locations. There is no limit on the number of applications for an Applicant.
LIST OF GOODS COVERED
Sr. No. | Description of Goods –Minimum Investment Threshold Limit of INR 5 crore |
1 | SMT components including LED Chips |
2 | Chip Modules for Smart Cards, RFID Antenna & Labels, CoB/ System in Package |
3 | Passive components including resistors, capacitors, ferrites, specialty ceramics, etc. for electronics applications |
4 | Electromechanical components including transformers, inductors, coils, relays, switches, micro motors, stepper motors, BLDC Motors, Connectors, Heat Sinks, Antenna, Speakers, Microphones, etc. for electronic applications |
5 | Magnetrons, Wave guides, Circulators, Couplers, Isolators, Filters, Magnets, RF Components for electronic applications |
6 | Printed Circuit Boards (PCBs), PCB Laminates, Prepegs, Photopolymer films, PCB Printing Inks; Printed Flexible Electronics |
7 | Sensors, Transducers, Actuators and Crystals for electronic applications |
8 | Camera Modules, Vibrator motor/ ringer |
9 | USB/Data Cables, HDMI Cables |
10 | Capital goods for all the goods covered under SPECS including components 10. and sub-assemblies for capital goods required for manufacturing of semiconductors / displays covered under SPECS |
11 | Specialty chemicals, high purity gases, electronic specialty gases (ESG) of 11. semiconductor grade specifications used across various stages of manufacturing of semiconductors / displays covered under SPECS |
INVESMENT REQUIREMENTS
Sr. No. | Description of Goods –Minimum Investment Threshold Limit of INR 5 crore |
1 | SMT components including LED Chips |
2 | Chip Modules for Smart Cards, RFID Antenna & Labels, CoB/ System in Package |
3 | Passive components including resistors, capacitors, ferrites, specialty ceramics, etc. for electronics applications |
4 | Electromechanical components including transformers, inductors, coils, relays, switches, micro motors, stepper motors, BLDC Motors, Connectors, Heat Sinks, Antenna, Speakers, Microphones, etc. for electronic applications |
5 | Magnetrons, Wave guides, Circulators, Couplers, Isolators, Filters, Magnets, RF Components for electronic applications |
6 | Printed Circuit Boards (PCBs), PCB Laminates, Prepegs, Photopolymer films, PCB Printing Inks; Printed Flexible Electronics |
7 | Sensors, Transducers, Actuators and Crystals for electronic applications |
8 | Camera Modules, Vibrator motor/ ringer |
9 | USB/Data Cables, HDMI Cables |
10 | Capital goods for all the goods covered under SPECS including components 10. and sub-assemblies for capital goods required for manufacturing of semiconductors / displays covered under SPECS |
11 | Specialty chemicals, high purity gases, electronic specialty gases (ESG) of 11. semiconductor grade specifications used across various stages of manufacturing of semiconductors / displays covered under SPECS |
ELIGIBLE CAPEX
1.Expenditure incurred on plant, machinery, equipment and associated utilities:
- tools, dies, moulds, jigs, fixtures (including parts, accessories, components, and spares thereof) of the same.
- expenditure on packaging, freight/ transport, insurance, and erection and commissioning.
- The Associated utilities – captive power and effluent treatment plants, essential equipment required in operations areas such as clean rooms, air curtains, temperature and air quality control systems, compressed air, water & power supply and control systems, etc.
- The Associated utilities also include IT and ITES infrastructure related to manufacturing including servers, software and ERP solutions.
- The total expenditure incurred on associated utilities – not exceeding 20% of the total eligible capital expenditure for plant, machinery and equipment.
2.Expenditure incurred for Research and Development (R&D): Include expenditure on in-house and captive R&D including test and measuring instruments, purchase of design tools, software cost (directly used for R&D) and license fee, expenditure on technology, IPR, Patents and Copyrights for R&D – not exceeding 20% of the total eligible capital expenditure.
3.Expenditure incurred on Transfer of Technology (ToT) : including cost of technology: Include cost of technology and initial technology purchase related to goods – not exceeding 10% of the total eligible capital expenditure.
4.Expenditure incurred on refurbished plant, machinery and equipment : Include expenditure on used / second hand / refurbished plant, machinery and equipment (including for associated utilities and R&D), whether imported or procured domestically – not exceeding 20% of the total eligible capital expenditure.
5.Expenditure incurred on Land and Building: The expenditure incurred on land and building (including factory building / construction) required for the project / unit is not covered under the Scheme.
6.Expenditure on consumables and raw material used for manufacturing shall not be considered as capital expenditure.
APPLICATION PROCESS
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