Govt extends deadline of IT hardware products PLI scheme till August 30

The government on Monday extended the deadline to apply for benefits under the production-linked incentive scheme for IT hardware products such as laptops, tablets, all-in-one PCs, servers, and edge computing devices till August 30.

As notified in May, the modified IT hardware PLI scheme offers incentives of up to 9 per cent on incremental sales of locally manufactured IT products to attract investments in the sector. Initially, the application window was set at 45 days from the launch of the scheme.

The budgetary outlay was more than doubled to Rs 17,000 crore compared to the previous scheme with a provision of Rs 7,325 crore. As per the government’s estimates, the new scheme is likely to generate 75,000 direct jobs. The revised scheme was notified in the official gazette on May 29.

The PLI scheme may provide maximum incentives of Rs 4,500 crore for global companies, Rs 2,250 crore for companies with hybrid (global and domestic) production models, and Rs 500 crore for domestic companies. The incentive will depend on net incremental sales of manufactured goods over the base year of 2022-23. So far, as announced earlier this month, Hewlett Packard Enterprise’s (HPE) server manufacturing facility has been approved to receive benefits under the scheme.

The new scheme offers additional incentives for the localisation of certain optional items. Localisation of semiconductor design, IC manufacturing, and packaging have been newly added to the scheme as incentivised components.

Incentives shall be applicable from July 1, 2023, or April 1, 2024, or April 1, 2025, for a tenure of six years, depending on the applicant’s choice to commit incremental investment and incremental sales under the PLI 2.0 scheme. The government had included this provision to offer more flexibility for the applicants in terms of investments and tenure.

For the first year of the incentive, eligible sales will be considered for nine months, starting from July 1, 2023, for which the incentive is being claimed. The number of applications allowed per applicant for support under the scheme is restricted to 1.

As per the scheme guidelines, each applicant would need to mention an estimated PLI amount for individual years, which will act as a ceiling. “To keep projection discipline in the scheme, there will be a provision for a penalty of 5 per cent from payable PLI amount if the actual PLI amount for a year is less by 25-50 per cent and a penalty of 10 per cent if the shortfall is more than 50 per cent from the estimated PLI amount given by the applicant at the time of application,” according to the notification. Business Standard