Special incentive scheme for ESDM sector - Power Tariff Reimbursement scheme

This incentive is administered by the Karnataka Innovation & Technology Society, under the Department of Electronics, Information Technology, Biotechnology & Science & Technology, Government of Karnataka. The purpose of the Power Tariff Reimbursement incentive is to reduce the operating cost burden (in particular power/electricity input cost) for eligible electronics system design & manufacturing units by reimbursing a fixed amount per unit of power consumed for a specified period. For your business, this means that if you are in the ESDM sector in Karnataka and you qualify, the state will reimburse part of your electricity cost which improves your cost structure and competitiveness.

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

Key Features

Fixed subsidy of INR 1.00 per unit of electricity consumed: The scheme stipulates that the Government of Karnataka shall provide a subsidy of INR 1.00 for each unit of power consumed by the approved ESDM unit.
Applicable for a period of 5 years from commencement of commercial production: The reimbursement benefit is available for the first five years from the date of commercial production of the unit as defined in the guidelines.
Eligible for new investment in ESDM sector: The policy applies to new greenfield ESDM manufacturing or the expansion of existing units that register and meet the eligibility criteria.
Based on power units consumed by the approved project/unit: For expansions, the reimbursement is calculated on the incremental power consumption above the base year.
Available only for units registered under the ESDM Special Incentive Scheme: Only ESDM units that have been approved under the Special Incentives Scheme for ESDM Sector 2020-25 and fulfil the registration process are eligible.

Financial Assistance

Component	Assistance Provided	Detailed Explanation
Power Tariff Reimbursement	INR 1.00 per unit of power consumed by the unit	Example: Suppose your approved ESDM manufacturing unit consumes 5 million kWh in the first year of commercial production. At INR 1 per unit, you could claim a reimbursement of INR 5 million (₹ 50 lakh) for that year under this incentive.
Duration	For 5 years from commencement of commercial production	The reimbursement applies for each of the first five years - subject to verification and eligibility criteria.
Base year/Incremental usage	For expansions of existing units, only incremental power consumption above the base year counts	Example: An existing unit’s base year consumption was 3 million kWh; after expansion it consumes 4.5 million kWh. The incremental 1.5 million kWh would qualify for INR 1 per unit reimbursement.

Eligibility Criteria

Who Can Apply:

Manufacturing/assembly units in the ESDM sector registered under the Special Incentives Scheme for ESDM Sector 2020-25.
Units that commence commercial production during the incentive period under the scheme.
For expansions, units must register the new capacity and use incremental power consumption basis.

Who Cannot Apply:

Units not in the defined ESDM sector or not registered under this scheme.
Units that do not commence production within the stipulated timeline or fail other conditions of the scheme.
For expansion cases, only the incremental consumption qualifies, base-year consumption does not.
The total quantum of incentives sanctioned to a unit under this package shall not exceed 100% of the fixed asset value created by the unit.

Documents Required

Approval letter under the Special Incentives Scheme for ESDM Sector.
Certificate of Incorporation / Registration of the enterprise.
Date of commencement of commercial production certificate.
Power consumption data for the unit/project for each year certified by statutory auditor or another approved agency.
Utility bills / electricity invoices / monthly consumption records showing units consumed.
For expansion cases: base-year consumption certificate, auditor certificate of incremental consumption.
Claim form for Power Tariff Reimbursement.
Bank account details of the enterprise for receiving reimbursement.

Application Process for the Scheme

Option 1: Apply with Bullit

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
Recommended for: Manufacturing units seeking to streamline the reimbursement claim and expedite benefit realisation.

Option 2: Via KITS / Single Window Portal

Register your project under the Special Incentives Scheme for ESDM Sector 2020-25 via KITS and obtain “in-principle” sanction for incentives.
Commence commercial production and ensure meter/billing records reflect your power consumption.
Fill out the application form for Power Tariff Reimbursement along with required production/power consumption data.
Submit documentation including power bills, signed undertakings, unit start date, etc as per guidelines.
Upon verification by KITS and submission of required bank guarantee or undertaking, the reimbursement is sanctioned and disbursed.

Option 3: Via Utility / Power Distribution Company Support

Coordinate with your electricity supply agency to obtain separate meter/documentation for the new unit or expansion .
Maintain timely and accurate power consumption records to ensure smooth reimbursement claims.
Work with KITS to align power bills and claim submissions.