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LICENSING AND REGISTRATION FORMALITIES


Q.1	Which projects require an Industrial Licence (IL) and how is it obtained?
Q.2	How a small scale industrial undertaking is defined?
Q.3	How an ancillary industrial undertaking is defined?
Q.4	If I want to set up a small scale unit in Gujarat, is any registration required?


Q.1	HCD	Which projects require an Industrial Licence (IL) and how is it obtained?
Ans.		Way back in 1991, the Government of India as a part of liberalisation measures had delicensed most of the industries. Licensing (Initially Letter of Intent and thereafter conversion of LoI into Industrial Licence) was required only in respect of industries, for reasons related to security and strategic concerns, social reasons, problems related to safety and over-riding environmental issues, manufacture of products of hazardous nature and articles of elitist consumption. Initially, 18 industries were placed in this list but the same was pruned from time to time and today, there are only six industries requiring industrial licence. These six industries include: distillation and brewing of alcoholic drinks; Cigars and cigarettes of tobacco and manufactured tobacco substitutes: Electronic aerospace and defence equipment – all types; Industrial explosives, including detonating fuses, safety fuses, gun powder, nitrocellulose and matches; Hazardous chemicals; Drugs and Pharmaceuticals (according to modified Drug Policy issued in September, 1994 and subsequently amended in February, 1999). The project however, should not be located within 25 km of a city with a population of more than one million For the rest of the industries, the Government of India have introduced a system of filing an Industrial Entrepreneurs Memorandum (IEM). For industries requiring licence, the application in form IL-FC which can be downloaded from the SIA website ( http://indmin.nic.in ) should be filed with the Secretariat for Industrial Approvals (SIA). Approvals along with a demand draft of Rs.2500/- drawn in favour of Pay & Accounts Officer, Department of Industrial Development, Ministry of Industry, payable at the State Bank of India, Nirman Bhavan Branch, New Delhi.


Q.2	HCD	How a small scale industrial undertaking is defined?
Ans.		An industrial undertaking is defined as a small scale unit, if the investment in fixed assets in plant and machinery does not exceed Rs 10 million.


Q.3	HCD	How an ancillary industrial undertaking is defined?
Ans.		An industrial undertaking which is engaged in the manufacture or production of parts, components, sub assemblies, tooling or intermediates or the rendering of services and undertaking supplies, of not more than fifty percent of its production or services to one or more industrial undertaking whose investment in fixed assets in plant and machinery whether held on ownership terms or on lease or on hire purchase basis does not exceed Rs 10 million .


Q.4	HCD	If I want to set up a small scale unit in Gujarat, is any registration required?
Ans.		For setting up a small scale unit, you have to obtain a small scale industry registration from the concerned District Industries Centre in which the project is proposed to be located. For the purpose, an application in the prescribed form is to be submitted before implementing the project and the DIC will initially issue a provisional registration with a validity of one year during which the project will normally be implemented. This validity may be extended twice for six months each. On completion of the project, the DIC may be approached with a request to issue a final registration. DIC in turn after inspection of the unit will issue the final registration.

While every care is exercised in compiling the information in terms of its authenticity, iNDEXTb is not responsible for any error of judgement or interpretation of relevant policy provisions. The version or the interpretation of the concerned department/organisation be treated as final.