FREIGHT ASSISTANCE SCHEME

Freight Assistance Scheme: Empowering Haryana's Exporting Enterprises

Introduction

The Freight Assistance Scheme, introduced by the Government of Haryana under the Haryana Enterprises and Employment Policy (HEEP) 2020, is a pivotal step toward fostering the growth of Micro, Small, and Medium Enterprises (MSMEs) engaged in exporting products from Haryana. The scheme seeks to alleviate the high transportation costs faced by these businesses, especially those located in areas far from international borders and sea ports.

Given the challenges of inland transport for export-oriented enterprises, this scheme provides vital financial support, ensuring that businesses in Haryana can compete effectively in the global marketplace. Through this initiative, the state aims to boost its export potential, enhance industrial growth, and create a more inclusive business environment for micro, small, and medium-sized enterprises (MSMEs).

Understanding the Freight Assistance Scheme

The Freight Assistance Scheme is an incentive offered by the Haryana government to assist exporting units by covering a portion of their freight expenses. This initiative focuses primarily on micro, small, and medium enterprises that engage in international trade. These businesses often face significant hurdles due to their geographical locations, which are typically far from major sea ports and air cargo terminals.

Purpose of the Scheme:

The goal of the scheme is to provide financial support to export-oriented businesses in Haryana by:

• Reducing the burden of freight costs associated with exports.
• Encouraging MSEs to explore international markets and expand their reach.
• Increasing the global competitiveness of Haryana-based enterprises.

Target Audience:

The scheme is primarily designed for micro, small, and medium enterprises involved in exports. However, its special provisions make it accessible to both newly established and existing enterprises. ZED (Zero Defect, Zero Effect) certified units are given preference, ensuring that businesses follow environmentally friendly and quality standards.

Quantum of Assistance

Under the Freight Assistance Scheme, financial assistance is provided based on a percentage of the Free on Board (FOB) value or the actual freight charges incurred, whichever is lower. The assistance is as follows:

• 1% of the FOB value of the export.
• Alternatively, the actual freight expenses (excluding taxes and government fees) incurred for transporting goods from the place of manufacture to the seaport, air cargo, or international border.

The scheme sets the maximum annual assistance limits based on the category of the development block in which the enterprise is located:

• ₹10 lakh per annum for enterprises in C and D category blocks.
• ₹5 lakh per annum for enterprises in A and B category blocks.

Eligibility Criteria for the Scheme

To be eligible for assistance under the Freight Assistance Scheme, businesses must fulfill several criteria:

1. Business Classification: The enterprise must be classified as a Micro, Small, or Medium Enterprise (MSME) under the Udyam Registration or an equivalent certification.
2. ZED Certification: Only ZED (Zero Defect, Zero Effect) certified units can avail the subsidy. This ensures that businesses maintain high standards of product quality and environmental sustainability.
3. Export Activity: The enterprise must be engaged in exporting goods to international markets.
4. Geographical Location: The enterprise must be located anywhere in Haryana, though it must be in compliance with the requirements of the scheme regarding development block categorization.
5. Timely Submission of Application: Claims for freight assistance must be submitted within three months from the end of the financial year during which the export took place or from the date of the scheme’s notification, whichever is later.

How to Apply for the Freight Assistance Scheme

The application process for the Freight Assistance Scheme is structured and requires certain steps to be followed. These steps are crucial for ensuring that your business is eligible to receive the assistance.

Step-by-Step Guide to Application:

1. Verification of Eligibility: Ensure that your business falls under the micro, small, or medium category, and is ZED certified.
2. Gather Required Documents: The following documents need to be prepared for submission:
• Udyam Registration Certificate or an equivalent registration document.
• ZED Certification from the Quality Council of India or an equivalent authority.
• Shipping Bills and Export Invoices as proof of export activity.
• Freight Payment Receipts to substantiate the actual freight expenses incurred.
• Bank Statements or Cancelled Cheque for fund disbursement.
• CA Certified Statements for detailing FOB value and freight charges.
3. Online Application: Log in to the official Haryana government portal (or the relevant scheme portal) and submit the application along with all required documentation.
4. Review and Approval: Once submitted, the Directorate of Industries and Commerce will review the application, verify the documents, and approve the subsidy.
5. Disbursement: After successful approval, the freight assistance will be credited directly to the enterprise’s bank account.

Benefits of the Freight Assistance Scheme

The Freight Assistance Scheme provides numerous benefits to eligible businesses:

1. Reduction in Export Costs: Freight charges are often one of the largest expenses for exporting companies. The subsidy helps reduce this financial burden.
2. Improved Global Competitiveness: By lowering logistics costs, Haryana-based exporters can price their products more competitively in international markets.
3. Boosts Export Growth: The scheme encourages new and existing businesses to expand their export activities by providing financial support.
4. Encouragement for Sustainable Practices: The requirement for ZED certification ensures that participating enterprises maintain environmentally friendly and quality-driven production processes.
5. Inclusive Development: The scheme provides additional support to enterprises located in C and D category blocks, which are often economically underdeveloped.
6. Job Creation: As more businesses engage in exports, the overall industrial growth leads to increased employment opportunities within the state.

Role of MSMEs in Haryana’s Economic Growth

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of Haryana’s economy. They contribute significantly to employment generation, industrial output, and exports. The Freight Assistance Scheme is designed to empower MSMEs, enabling them to scale up their operations, enter international markets, and compete globally. By helping them overcome logistics-related challenges, the government ensures that these enterprises can thrive, regardless of their geographical limitations.

Why is ZED Certification Important?

The requirement for ZED certification under the Freight Assistance Scheme ensures that enterprises not only maintain high standards of product quality but also adopt environmentally sustainable manufacturing practices. ZED certification:

• Enhances credibility: It serves as a mark of quality and environmental responsibility.
• Opens doors to more opportunities: Many international buyers prefer suppliers who adhere to ZED standards.
• Improves internal processes: ZED-certified businesses often have more efficient and cost-effective production processes.

Key Takeaways

The Freight Assistance Scheme is a transformative initiative by the Haryana government, specifically aimed at empowering MSMEs in the state’s export sector. It helps businesses by subsidizing the freight costs associated with international exports, making Haryana’s products more competitive in global markets.

This scheme supports not only the micro and small enterprises but also medium enterprises, which now have access to financial assistance, creating a more equitable business environment across the state.

At Advice Consultant, we specialize in guiding businesses through the application process to ensure that they maximize the benefits available under the Freight Assistance Scheme. We offer expert assistance, ensuring that your business meets all eligibility criteria and submits complete documentation in a timely manner.