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Q.1 What is PLI Scheme for White Goods?
Ans: The Production Linked Incentive (PLI) Scheme for White Goods (PLIWG) as notified on April 16, 2021 shall provide financial incentive to boost domestic manufacturing and attract large investments in the White Goods manufacturing value chain. Its prime objectives include removing sectoral disabilities, creating economies of scale, enhancing exports, creating a robust component ecosystem and employment generation. The PLI Scheme shall extend an incentive of 4% to 6% on net incremental sales (net of taxes) over the base year (FY 2019-20) of goods manufactured in India or net incremental sales of eligible products over the base year or FY 2020-21, whichever is higher, as the case
may be and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year and gestation period as specified in the scheme guidelines.
Q.2 Who can be an Applicant under the Production Linked Incentive Scheme for White Goods (PLI-WG Scheme)?
(Ref. Clause 2.2 of the Scheme Guidelines)
Ans: Applicant for the purpose of the Scheme shall be any company incorporated in India and as defined under the provisions of the Companies Act 2013, to manufacture one or more eligible product(s) under the specified target segment(s) and making an application for seeking approval under the Scheme.
Q.3 Whether a Limited Liability Partnership (LLP), which qualifies all the parameters set as regards Gross Block, Global Revenue and Net worth under Clause 6 of the Scheme Guidelines could avail PLI benefits?
(Ref. Clause 2.2 of the Scheme Guidelines)
Ans.: Any company incorporated in India and as defined in the Companies Act 2013, proposing to manufacture one or more eligible product(s) under the specified target segment can be an applicant. LLPs are not covered under the Companies Act, 2013. Therefore, LLPs cannot avail PLI benefits under this Scheme.
Q.4 As per Clause 5 (Pre-qualification criteria) 5.1- The applicant should be a Company incorporated in India under the provision of the Companies Act 2013. Does it mean that companies registered under Companies Act 1956 (old act) are not eligible for this PLI scheme?
Ans.: Any company incorporated in India and as defined in the Companies Act 2013, proposing to manufacture one or more eligible product(s) under the specified target segment can be an applicant. The Section 2(20) of the Companies Act, 2013, defines the term ‘Company’ as “Company means a company incorporated under this Act or under any previous company law.” Hence, the companies incorporated under the Companies Act, 1956, are also eligible to file an application under PLI scheme of white goods.
Q.5 What is the meaning of “New manufacturing facility” under brownfield definition? (Ref. Clause 2.10 of the Scheme Guidelines)
Ans.: “New manufacturing facility” under brownfield definition means fresh investment on new Plant, Machinery & Equipment, Research & Development, Transfer of Technology and Associated Utilities, for manufacturing of eligible product(s) under the respective target segment in addition to any existing manufacturing facilities in a premise.
Q.6 The definition of Brownfield Project (Clause 2.10), the Guidelines states ‘Separate records shall however be maintained for the new manufacturing facility(ies) in the premises of an existing manufacturing facility(ies) for the purpose of the Scheme’. Is identification of production and consumption/sale of eligible products is sufficient or separate Trial Balance, Profit & Loss A/C or Balance Sheet is expected?
(Ref. Clause 2.10 of the Scheme Guidelines)
Ans.: The applicant may not prepare a separate P&L Account or Balance Sheet but shall have separate ledgers, Trial Balance, Supporting Bills, Invoices & Vouchers etc. for eligible investment made under the scheme and ensure that the assets created out of the eligible investment made by the applicant under the scheme and production from such assets is clearly identifiable.
Q.7 What are the Eligible products under PLI Scheme?
(Ref. Clause 2.15 and Appendix 2 of the Scheme Guidelines)
Ans: Support under the Scheme shall be provided to companies engaged in manufacturing of components of Air Conditioners and LED Lights in India. The list of Target segments and Eligible products are as under:
1) Target Segment and Eligible Products – Air Conditioners
| Sl. | Target Segment | Large Investment | Normal Investment |
| 1. | ACs (Components) | Eligible Products | |
| (i) High value Intermediaries of ACs | |||
| (ii) Low Value Intermediaries of ACs | |||
| (iii) A combination of (i) and (ii) | |||
| 2. |
High Value
Intermediaries of ACs |
(i) Compressors including oil free and high capacity | |
| (ii) Copper Tube (plain and/or grooved) | |||
| (iii) Aluminum Stock for Foils or Fins for heat exchangers | |||
| 3. |
Low Value
Intermediaries of ACs |
(i) Control Assemblies for IDU or ODU or Remotes | |
| (ii) Display Panels (LCD/LED) | |||
| (iii) Motors | |||
| (iv) Cross Flow Fan (CFF) | |||
| (v) Valves & Brass components | |||
| (vi) Heat exchangers | |||
| (vii) Sheet Metal components | |||
| (viii) Plastic Moulding components | |||
| 2) Target Segment and Eligible Products – LED Lights | |||
| 1. | LED (Core Components) | (i) LED Chip Packaging | |
| ()Integrated Circuits (ICs) | |||
| (i) Resistors | |||
| () Fuses | |||
|
(ii) Large-scale investments
components |
|||
| (i) LED Chips | |||
| (ii) LED Drivers |
| Sl. | Target Segment | Large Investment | Normal Investment |
| Eligible Products | |||
| (iii) LED Engines | |||
| (iv) LED Modules | |||
| (v) Printed Circuit Boards (PCB) including Metal clad PCBs |
|||
| (vi) Mechanicals- Housing | |||
| (vii) Wire Wound Inductors | |||
| (viii) Drum Cores | |||
| (ix) Heat Sinks | |||
| (x) Diffusers | |||
| (xi) Ferrite Cores | |||
| (xii) LED Light Management Systems (LMS) | |||
| ( ) Resistors | |||
| (i) Fuses | |||
| (ii) Capacitors | |||
| (iii) LED Transformers | |||
| (xiii) Laminates for Printed Circuit Boards and Metal Clad PCBs | |||
| (xiv) Metallized film capacitors |
Q.8 It is imperative that finished goods should be included under the PLI Scheme to make the OEM more aggressive and expand the domestic market.
(Ref. Clause 2.15 and Appendix 2 of the Scheme Guidelines)
Ans.: The objective of the scheme is to boost domestic manufacturing and facilitate development of a robust ecosystem for component manufacturing across the value chain in the country for Air conditioners (ACs) and LED Lights. Accordingly, finished goods have not been included under the Scheme.
Q.9 Whether components to manufacture AC Compressor (or any other AC components) will be eligible for incremental investment and incremental sale or not?
Ans.: Investments on setting up manufacturing facilities for components of compressor or any other AC components by a selected applicant as part of backward integration shall be considered as eligible investment under the scheme.
However, any component of eligible products not listed in the list of eligible products in Appendix-II of the Scheme Guidelines, shall not be considered in the net sales turnover of eligible products.
Q.10 What are the investment categories under each target segment? Can an applicant apply under more than one investment category?
(Ref. Clause 2.27 of the Scheme Guidelines)
Ans: There are two investment categories under each Target segment as given below. An applicant can apply under any one of following investment categories for any one target segment:
(i) Large Investment
(ii) Normal Investment
Q.11 What does Incremental Investment over Base Year mean?
Ans: The Incremental investment over base year shall mean the eligible cumulative incremental Investment made by the applicant on or after April 1, 2021.
Q.12 Is it possible for an applicant company to commit investments for manufacturing multiple products from High Value Intermediaries and Low Value Intermediaries for the purpose of the PLI Scheme to meet the threshold in investment and revenues?
Ans.: Yes. The Target Segment “ACs Components” provides an option to choose combination of multiple eligible products along with stipulated threshold investment.
For e.g. An applicant may choose to manufacture “Compressors” from the target segment of “High Value Intermediaries of ACs” and “Motors” from the Target segment of “Low Value Intermediaries of ACs” under any one of the two investment categories (Large/Small Investment) by applying under the target segment “ACs (Components) and choosing A Combination of (i) and (ii) as defined in Appendix –II of the scheme guidelines”
Q.13 What is Initial Investment Period (Gestation Period)?
(Ref. Clause 2.28 of the Scheme Guidelines)
Ans: The initial Investment period (Gestation period) is the gestation time given for setting up of manufacturing facilities to manufacture the eligible products. An applicant may opt for any one of the following initial investment periods–
(i) 1st April, 2021 to 31st March, 2022
or
(ii) 1st April, 2021 to 31st March, 2023
Q.14 What if the Consolidated Global Revenue of the applicant (including Group Companies) in the Target Segment is available in currency other than INR?
(Ref. Clause 2.20 of the Scheme Guidelines)
Ans: In case of Group Companies of the applicant whose revenues for the base year have not been consolidated in Rupees, the revenue in the respective currency shall be converted to Rupees at an average of currency exchange rates as on 01.04.2019 and 31.03.2020 or as on 1.04.2020 and 31.03.2021 as the case may be.
Q.15 What does the Threshold Investment mean?
(Ref. Clause 2.38 of the Scheme Guidelines)
Ans.: The amount of minimum cumulative investment to be made by the applicant in each financial year for respective target segment as specified in Appendix-I of the Scheme Guidelines.
Q.16 What is the tenure of the Scheme?
(Ref. Clause 3 of the Scheme Guidelines)
Ans.: The tenure of the Scheme shall be from Financial Year 2021- 22 to Financial Year 202829.
Q.17 How will the annual ceiling on incentive payable to each applicant be determined? (Ref. Clause 4.2 and 4.3 of the Scheme Guidelines)
Ans: The Scheme is Fund Limited. The amount of incentive shall be capped on the following basis:
For Air Conditioners – net incremental sale of eligible product(s) upto 5 times of the cumulative threshold investment in the previous financial year.
For LED Lights – net incremental sale of eligible product(s) upto 6 times of the cumulative threshold investment in the previous financial year.
Over performance of any selected applicant shall not be incentivised and the amount of incentive arising out of under performance of any selected applicant in any target segment shall not be disbursed to any other applicant.
Q.18 What are the Pre-Qualification Criteria under PLI Scheme?
(Ref. Clause 5 and Appendix- I or Appendix-IA of the Scheme Guidelines)
Ans: 1) The applicant should be a company incorporated in India under the provisions of the Companies Act, 2013.
2) Foreign (non-resident) investment in the Applicant Company shall be in compliance with the FDI Policy 2020, as amended from time to time.
3) An applicant must propose setting up of greenfield or brownfield project for manufacturing of one of more eligible product(s) under any investment category in the respective target segment as defined in scheme guidelines.
4) An applicant should commit for setting up manufacturing facilities to manufacture eligible product(s) along with appropriate quality and testing facilities conforming to prescribed Standards commensurate with committed incremental sales.
5) The minimum committed cumulative investment for respective Target Segment shall be as indicated in Appendix- I or Appendix-IA of the Scheme Guidelines as the case may be.
6) The minimum amount of: –
(i) Gross Block
(ii) Global Revenue
(iii) Net Worth
of the applicant and its group companies (Indian or overseas) as on 31 March 2020 or 31 March 2021 as the case may be shall be as under :-
(Rs. in Crore)
| Sl. | Target Segment | Gross Block | Global Revenue |
Net Worth |
Gross Block | Global Revenue |
Net Worth |
| 1 | AC (Components) | 300 | 1500 | 180 | 150 | 600 | 90 |
| 2 | AC (High Value Intermediaries) | 200 | 1000 | 120 | 125 | 500 | 75 |
| 3 | AC (Low Value Intermediaries) | 50 | 250 | 30 | 25 | 100 | 15 |
| 4 | LED (Core Components) | 150 | 750 | 90 | 50 | 200 | 30 |
| 5 | LED (Components) | 12 | 60 | 7.5 | 5 | 20 | 3 |
8) Value-Added Resellers shall not qualify under the scheme.
9) The applicant and its group company(ies) should neither have been declared as bankrupt or willful defaulter or defaulter or reported as fraud by any bank or financial institution or non-banking financial company.
10) An applicant availing benefits under any other PLI scheme of Government of India for the same product(s) shall not be eligible under this PLI scheme.
Q.19 Whether those companies which are able to meet the overall pre-eligibility criterion in the year FY 2020-21 instead of FY 2019-20 would be eligible for the PLI Scheme?
(Ref. Clause 5.6 of the Scheme Guidelines)
Ans.: Yes. Companies meeting the pre-qualification criteria on the basis of audited financial statements for FY 2020-21may also apply under the scheme.
Q.20 Do the Value-Added Resellers qualify under the scheme?
(Ref. Clause 5.7 of the Scheme Guidelines)
Ans: No. Value-Added Resellers do not qualify under the scheme.
Q.21 Whether a beneficiary under other PLI Scheme of Government of India can avail benefits for the same products under the PLI-WG scheme?
(Ref. Clause 5.9 of the Scheme Guidelines)
Ans: An applicant availing benefits under any other PLI scheme of Government of India for the same product(s) shall not be eligible under this PLI scheme.
Q.22 Whether any relaxation could be granted to start-ups or any other Company who are unable to meet the pre-qualification criteria as per Clause 5.6 of the Scheme Guideline, to participate in the PLI scheme.
(Ref. Clause 5.10 of the Scheme Guidelines)
Ans.: As per Clause 5.10 of the Scheme Guidelines, Govt. on recommendations of the Committee of Experts, may relax pre-qualification criteria specified in Clause 5.6 for an applicant.
Q.23 Additional relaxation or benefit should be given to the brownfield projects who have already invested in the eligible products otherwise greenfield projects have a better chance to get the benefit of PLI during the entire tenure of the scheme.
Ans.: The Scheme does not intend to create any entry barrier for investments and offers incentives on fresh investments in a greenfield OR a brownfield project with same Investment: Sales ratio. Hence, it would not be prudent to provide any relaxation to the brownfield projects.
Q.24 If an applicant is in the process of identifying the place where we intend to set up the manufacturing facility and not able to decide before the last date of submission of online application (i.e. 15th September 2021), in that case what should be mentioned in the Application form as regards to location?
Ans.: It is recognized that Applicants, particularly who have formed new entity under Companies Act, 2013, may require some time to decide upon to finalize suitable location of manufacturing plant. Hence, it is not mandatory to indicate the exact location of plant in the on-line application form. However, Applicant must indicate at least the name of the District during submission of on-line application form and submit the exact location of the plant within three months of the receipt of the communication of selection by the PMA.
Q.25 Since the Scheme is for five years and Applicants can invest periodically to satisfy the cumulative threshold investment criteria, there may be possibility that a selected applicant may like to put up another manufacturing facility at another location in India in addition to the existing location to cater to local demand or any other reason. In such case, what would be done?
Ans.: Selected applicants would be allowed to submit the details of additional location with all relevant documents within two years of commencing commercial production during the tenure of the Scheme.
Q.26 Does an applicant proposing to manufacture more number of components in the entire value chain have higher priority in selection?
(Ref. Clause 6.4 of the Scheme Guidelines)
Ans: As provided in Clause 6.4 of the scheme guidelines, an applicant proposing to manufacture more components in the entire value chain will have the higher priority in selection.
Q.27 What are the Eligibility Criteria for incentive under PLI Scheme?
(Ref. Clause 7 and Appendix- I or Appendix-IA of the Scheme Guidelines)
Ans:
iii. The incremental sales of eligible products should be commensurate with created production capacity from investments committed under the scheme.
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