Industrial Promotion Subsidy (IPS) under Industrial Policy

The Industrial Promotion Subsidy (IPS) is a fiscal incentive provided by the Government of Maharashtra. It reimburses a portion of the State Goods and Services Tax (SGST) paid on the first sale of eligible products, thereby encouraging manufacturing investment and job creation in specified talukas and zones of Maharashtra.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

IPS offers reimbursement of 100% of Gross SGST (for many units) or 40 % of Net SGST (for special large units) paid on the first sale of eligible products billed & delivered in Maharashtra.
The benefit is linked to the taluka/zone classification (A, B, C, D, D+, No-Industry Districts, Naxal-affected Aspirational Districts). Lesser developed areas receive larger benefit windows.
Applies to new units or expansion/diversification of existing units within Maharashtra.
Encourages local manufacturing, helps reduce tax burden, improves cash flow, and strengthens Maharashtra’s manufacturing ecosystem.
Units in regions classified as D+, Naxal-affected, or aspirational districts may get longer eligibility periods (for instance 10 years).

Financial Assistance

Component	Assistance Provided	Detailed Explanation of Component & Assistance Provided
Industrial Promotion Subsidy (IPS)	Reimbursement of 100% of gross SGST paid by eligible MSME unit on first sale of eligible products in Maharashtra (under PSI-2019) and other defined cases.	Example: Suppose you set up a new MSME manufacturing plant in taluka category “C”. On first sale of eligible product you pay SGST of ₹10 lakh. If policy says you are reimbursed 100% of that amount, you get ₹10 lakh as IPS (subject to other ceilings). If your area allows a ceiling of 40% of FCI (say your FCI is ₹5 cr → ceiling ₹2 cr) then your total claim over years cannot exceed ₹2 cr.
Expansion / Diversification units	Existing units doing eligible expansion get IPS equal to 80% of what a new unit would get.	Example: If a new unit in a given taluka category would get 100% of first-sale SGST reimbursement, the expansion unit will get only 80% of that.
Special units / back-ward area bonus	Units in agro/food processing, green energy, Industry 4.0 etc may get additional benefit (e.g., +20%) and extra years of eligibility.	Example: A unit in a backward taluka doing agro-processing may get a higher eligible percentage or longer claim period under IPS, subject to policy limits.

Eligibility Criteria

Who can apply:

New manufacturing units or existing manufacturing units undertaking expansion/diversification in Maharashtra.
Units that produce “eligible products” (goods that are billed & delivered in Maharashtra) under the policy norms.
Units located in the various taluka/area classifications defined by the policy (A, B, C, D, D+, No-Industry, Naxal-affected, Aspirational).

Who cannot apply:

Units located outside Maharashtra.
Units whose first sale of eligible products is not billed & delivered within Maharashtra.
Units that do not meet minimum fixed capital investment / employment criteria (as defined for categories LSI, SLSI etc).
Units which have defaulted on statutory obligations or those manufacturing in ineligible categories (e.g., liquor, cigarettes, bidi etc).

Documents Required

Registration certificate of enterprise (e.g., Udyam/MSME or other registration).
Auditor’s certificate or tax officer certificate verifying SGST paid on first sale of eligible product(s).
Invoice(s) & delivery proof of first sale of eligible products, billed & delivered within Maharashtra.
Fixed capital investment certificate for the unit (new or expansion).
Employment certificate (if required) and other relevant compliance documents.
Bank account & KYC details of enterprise.

Application Process for the Scheme

Option 1: Apply with Bullit (Recommended)

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Option 2: Government Process

Register unit / commence investment / begin production as per policy norms.
After first sale of eligible product(s), prepare claim for IPS using auditor’s certificate / tax officer certificate showing SGST paid.
Submit application (Annexure A) along with proof of first sale, SGST paid, investment details to the nodal agency (e.g., Directorate of Industries).
On verification, subsidy is sanctioned and disbursed (via SGST refund) over the eligibility period.

Option 3: Offline / Hybrid Submission
In case online portal is not used, submit physical application to the approved office with required attachments and track through the Directorate of Industries.

Frequently asked questions

Is IPS available across all districts of Maharashtra?

Yes, the subsidy is available across Maharashtra, but the level of incentive and eligibility period vary depending on the classification of the district or taluka under the industrial policy.

Can an existing business apply for IPS?

Yes, an existing industrial enterprise can apply if it undertakes an eligible expansion or diversification project that meets the investment and operational requirements of the scheme.

Is an Eligibility Certificate required to claim IPS?

Yes. Industrial units must obtain an Eligibility Certificate from the competent authority before they can claim IPS benefits under the scheme.

What is meant by SGST reimbursement?

SGST reimbursement means that the government refunds the State Goods and Services Tax paid by the industrial unit on eligible sales within the state, subject to the approved incentive limit and conditions.

What is the eligibility period for IPS?

The subsidy is generally available for a defined eligibility period ranging from around seven to ten years depending on the location category and project type approved under the scheme.

Is IPS available to MSMEs?

Yes. MSMEs are major beneficiaries of IPS. The scheme encourages small and medium manufacturing enterprises by reimbursing SGST paid on eligible sales, helping them reduce operational costs and improve business sustainability.