IPMC

The following criteria determine eligibility of a Unit to apply for SIS:

• IT Units located in Kerala outside Special Economic Zone (SEZ).
• IT Units engaged in:
• IT Software Development
• IT Services
• IT Enabled Services( excluding IT training institutes that provide training to the public)
• Hardware Manufacture
• Please refer to SIS Subsidy Manual 2017 Sections 7 and 8 for details of eligible businesses.
• Units that have not availed SIS earlier and have started operations within the last six years from the date of application.
• Units that have availed SIS earlier and have invested over 25% above original investment (considered for prior SIS) for further business expansion/ modernization/ diversification and such business expansion/ modernization/ diversification has been completed after 01-12-2016.
• Units that have availed SIS earlier and NOT reached the maximum cap for providing subsidy under SIS scheme.
• Unit is not financed by Khadi & Village Industries Commission (KVIC) or Khadi & Village Industry Board (KVIB).
• In case of Partnership/ Proprietorship, none of the partners in the firm or the proprietor has 60% or more share in any other Unit that has already claimed or applied for SIS under a separate application.
• In case of a Company, it does not have more than 50% share in any other company or controlling interest in a proprietorship/ partnership firm that has already claimed or applied for SIS under a separate application.

Pending applications with Coordinating Officers of units that commenced commercial operation or completed expansion prior to 01.12.2016 would only be processed as per guidelines of State IT Policy issued vide GO (P) 19/12/ITD dated 12.10.2012.

In a particular financial year, the applicant can apply for SIS only in May-June or November-December or as announced by KSITM in the website.

• MD-KSIDC, MD-KFC, CEO-Kerala Startup Mission, MD-KSITIL and CEOs of Kerala IT Parks (Technopark, Infopark and Cyberpark) function as the Coordinating Officers (COs) based on location of the unit and whether the unit is supported by Government bodies.
• CEO Technopark has the jurisdiction over the units located at Thiruvananthapuram, Kollam and Pathanamthitta.
• CEO Infopark has the jurisdiction over the units located at Alappuzha, Kottayam, Idukki, Ernakulam, Thrissur and Palakkad.
• CEO Cyberpark has the jurisdiction over the units located at Kozhikodu, Wayanad, Malappuram, Kannur and Kasargod.
• CEO Startup Mission has jurisdiction over the units registered with Kerala Startup Mission irrespective of their location.
• If an IT Unit is registered under the brand name ‘Technolodge’ or registered under KSITIL, the Coordinating Officer would be MD KSITIL, irrespective of the location.
• For all units financed by KSIDC/KFC irrespective of their location, the CO shall be MD-KSIDC/MD-KFC.

Scenario 1: If a unit is located in Technopark/Infopark/Cyberpark, but which is registered under Startup Mission/ under the brand name ‘Technolodge’, then it is under the jurisdiction of CEO Startup Mission/ MD KSITIL.
Scenario 2: If a unit located in Technopark/Infopark/Cyberpark, but which is registered under Startup Mission and has availed a financial loan from KSIDC/KFC, then it is under the jurisdiction of KSIDC/KFC.
Scenario 3: A unit has availed a loan from KSIDC / KFC and is situated outside IT Parks then it comes under the jurisdiction of MD-KSIDC / MD-KFC irrespective of the location of the unit.

Applicable subsidy will be 30% of eligible Fixed Capital Investment (FCI) subject to a limit of Rs. 15 Lakhs for companies located in Thiruvananthapuram and Ernakulam districts. For companies located in districts other than Thiruvananthapuram and Ernakulam, the applicable Standard Investment Subsidy will be 40% of eligible Fixed Capital Investment subject to a limit of Rs. 25 Lakhs. As a special consideration, for companies located in hilly districts of Wayanad and Idukki, applicable SIS will be 50% of FCI subject to a limit of 25 lakhs.

Online application can be submitted at http://ipmc.kerala.gov.in or www.itmission.kerala.gov.in/ipmc/home .

The following documents need to be physically submitted to KSITM:

• Checklist of enclosed documents.
• Hard copy of the application duly signed and sealed by Applicant (Click on Menu->View submitted Application Form->Action. Take printout by using Ctrl +P)
• Covering letter sealed and signed by Proprietor/ ALL PARTNERS/ Board Members/ Director(as mentioned in Annexure I-C) in original referring to Application Reference Number.
• Annexure I-A (self declaration of primary activities)
• Annexure I-B (certificate that proprietor/ partners do not have 60% profit share in any other unit that has already claimed/ applied for SIS under a separate application)
• Annexure I-C (certificate that company does not have at least 51% share in any other unit that has already claimed/ applied for SIS under a separate application)
• Annexure I-D (Board resolution to be submitted by Society)
• Annexure II-D (Certificate by Electrical Inspector/ Chartered Engineer/ KSEB AEE/ PWD AXE if electrification costs exceed Rs.50,000/-)
• Annexure II-E (Certificate of valuation by Chartered Accountant)
• Annexure II-F (Certificate by Bank)
• Annexure II-G (Bank Guarantee) - This needs to be submitted only if your application is approved for Subsidy. You will be notified by email to submit Bank Guarantee in that case.
• Self attested copies of bills in support of all assets for which subsidy is being claimed. Enclose these in the same order as given in the application form.
• Self attested copy of the Partnership Deed/ Memorandum and Articles of Association and Certificate of Incorporation/ Bye-laws in case of units other than proprietary
• Self attested copy of the Registration Certificate from Registrar of Company/Firm/ Society of units other than proprietary
• Self attested copies of audited balance sheet with trade, profit & loss statement and details of FCI
• Self attested statement of Vision, goals and objectives of the Unit in line with the activities provided in Annexure I-A
• Self attested declaration of Any Dues or No Dues to Government or Government bodies
• Copy of lease deed executed for the said premise (if applicable)
• Necessary approval certificates from Local Self Government/ Udyog Aadhar/ MSME registration/ SSI registration/ Startup (DIPP) registration (required for Proprietorship).
• KYC - Self attested copies of PAN, TAN, GST and DIN of all Directors
• Agreement to be printed on Rs.200 stamp paper and to be submitted to KSITM after sanctioning of SIS in consultation with KSITM. This needs to be submitted only if your application is approved for Subsidy. You will be notified by email to submit Agreement in that case.

These documents should reach KSITM within 30 days of online application submission.

The Unit availing SIS may have to produce a Bank Guarantee to Kerala State IT Mission, valid for a period of 5 years, as a security for its agreement to the Terms and Conditions above.
Bank Guarantee amount is determined based on eligible subsidy amount against the application for SIS and Date of Commencement of operations of the Unit:

1. Unit that has been in operations for less than 3 years.
   The Unit, in this case, can choose between two options for submitting Bank Guarantee:
• Bank Guarantee Amount = 100% of Subsidy sanctioned. If this option is chosen, 100% of subsidy will be released on receiving the Bank Guarantee.
• Bank Guarantee Amount = 10% of Subsidy sanctioned. If this option is chosen, the subsidy will be released in 5 annual installments (over a period of 4 years), each amounting to 20% of subsidy sanctioned.
2. Unit that has been operational for more than 3 years but less than 5 years.
   Bank Guarantee need not be submitted. Sanctioned subsidy will be released in 3 installments:
• 1st payout = 60% of sanctioned subsidy upfront.
• 2nd payout = 20% of sanctioned subsidy on the Unit completing 4 years of successful commercial operations.
• 3rd payout = 20% of sanctioned subsidy on the Unit completing 5 years of successful commercial operations.
3. Unit that has been operational for more than 5 years but less than 6 years.
• Bank Guarantee need not be submitted.
• 100% of subsidy will be released upfront.

Once co-ordinating officer (CO) processes the application, the agenda note is forwarded to Director, KSITM. KSITM after verification would approve the subsidy and inform the unit (applicant) to submit the Bank Guarantee along with the required details. The BG may be obtained from a financial institution for the amount stipulated and in the format as advised by IT Mission (Annexure II-G). The BG has to have validity of 5 years from the date of receiving the SIS. Release of subsidy happens only after submission of BG. The BG will be kept in safe custody of KSITM for the stipulated period and would be released at the end of the 5 year period on submission of ‘proof of operation’ documents by the unit (self-certified company audited financial accounts).

The disbursement will be effected by KSITM directly to the applicant unit as mentioned in Annexure – II F or through the financing institution that has funded the applicant unit as certified by the CO in the Agenda Note.

• IT Software Development
• If the unit engages in software development in addition to providing training/ certification, then the Fixed Capital Investment calculated for the SIS application should not include the cost incurred for such training activities. E.g. The cost of setting up training halls, softwares/ licenses bought for training etc. cannot be added to the Fixed Capital Investment. Such units should include the details of products developed/being developed, total man-hours spent per product quantity, client details, cost incurred in developing the product and income from the products in each financial year in the Expression Of Interest document.
• IT Services
• IT Units engaged in providing Knowledge Management & Archiving, software testing, datacenter service and Data Ware House service for other business entities are eligible to apply for SIS.
• But Units providing hardware servicing, consultancy or network installation and services are not eligible to apply for SIS.
• IT enabled Services (excluding IT training institutes that provide training to the public)
• Units engaged in BPO, transcription centers, IT enabled (software based) call centers/customer service centre, GIS Mapping, medical billing and coding, electronic distribution through portal( no direct sales through outlets) are eligible under this category.
• But back office work and training are not considered as IT Enabled Services.
• Hardware Manufacture

Fixed Capital Investment on the following items shall be admitted to calculate the SIS.

• Furnishing / Interior
• Electrification
• Hardware / Software / Plant & Machinery

Furnishing includes cubicle partitioning, carpet works, painting, wallpaper, false ceiling, tile works and flooring works. The cost of furniture can be included under the cost of furnishing. It should not include sanitary items and plumbing. Please refer to SIS Subsidy Manual 2017 for details of items.

For claims less than Rs. 10 lakhs, the Administrator of KSITM is authorized to process the claim without referring it to the State Level Committee (SLC). If the claim exceeds Rs. 10 lakhs, the SLC shall review the claims.

1. The Unit shall not indulge in forgery, misrepresentation or deception in applying for the subsidy
2. Units availing SIS shall successfully carry out commercial operation at least for a period of 5 years from granting the subsidy. The units will be audited for operations of the unit in line with the objectives of the business (as set forth while applying for SIS) for the 5 years immediately succeeding the release of SIS
3. Assets on which investment is considered for SIS shall not be sold/ transferred for a period of 5 years from the date of purchase.

Cost of only Commercial Off-The Shelf(COTS) items will be accepted under FCI and not third party developed applications/portal/website.

The cost of only Perpetual Licensed COTS products like MS Office or Auto CAD will be allowed in FCI under software. Cost of cloud subscription and annual license renewal will not be allowed in FCI under software.

Date of Commencement of Commercial Production is the date of issue of

1. Certificate of Incorporation in case of LLP/Company
2. Registration Certificate from Registrar of Society in case of Society
3. Registration Certificate from Registrar of Firm in case of Partnership
4. Approval certificates from Local Self Government/ Udyog Aadhar/ MSME registration/ SSI registration/ Startup (DIPP) registration in case of Proprietorship