STAMP DUTY REFUND SCHEME

1. Overview & Purpose

Stamp duty is an upfront cost when acquiring land for industrial purposes. To encourage investment, the Government of Haryana introduced the Stamp Duty Refund Scheme as part of its Enterprises and Employment Policy-2020. This initiative refunds stamp duty paid on industrial land to boost industrial growth, particularly in the state’s less developed areas. The refund is designed to facilitate capital formation, incentivize MSMEs, large-scale units, mega projects, and thrust sectors, and help ready-to-start units mitigate initial fixed-cost burdens.

2. Who Can Benefit?

The scheme applies to a broad array of enterprises, ensuring equitable access across the industry spectrum:

• MSMEs (Micro, Small & Medium Enterprises)
• Large Units
• Mega Projects
• Ultra-Mega Projects
• Cluster Establishment or Relocation Projects
• Thrust Sector Industries (including bio-energy units)
• Essential Sector Enterprises

These categories ensure that both nascent entrepreneurs and significant investors are included.

3. Refund Structure – By Location and Category

The refund amount depends on two key factors:

• The classification of the industrial block where land is located (B, C, or D category)
• The nature of the enterprise (MSME, Large Unit, Thrust Sector, or Essential Sector)

Here’s how the scheme breaks down:

For MSMEs and Large Units

• D-category blocks: 100% stamp duty refund
• C-category blocks: 75% refund
• B-category blocks: 60% refund

For Thrust Sectors and Bio-Energy Enterprises (MSME, Large, Mega)

• C and D-category blocks: 100% refund
• B-category blocks: 80% refund

For Essential Sector Enterprises

• All B, C, and D-category blocks: 100% refund across the board

The differentiation ensures maximum stimulus in underdeveloped zones by significantly reducing capital expenditure for investors willing to establish or expand there.

4. Key Conditions & Timeline

To qualify, enterprises must fulfill the following requirements:

• Land must be designated for industrial use.
• Commercial production must begin within five years of land purchase.
• The enterprise must apply for the refund within three months after commencement of commercial production.

This two-tier time condition—five-year production start window plus three-month application—demands strategic planning and timely execution by entrepreneurs.

5. Why the Scheme Matters

Lower Entry Barriers

By offering up to 100% refund, the scheme directly counters the high cost of land and legally mandated duties, making industrial ventures economically more viable.

Encouraging Balanced Regional Development

Refunds are highest in D-category blocks, nudging businesses toward less industrialized zones in Haryana and promoting inclusive economic growth.

Supporting Strategic Industries

Thrust sectors like bio-energy receive elevated incentives, aligning with broader state goals of fostering clean energy, advanced manufacturing, and high-growth industries.

Boosting MSMEs

Small-scale and medium-scale enterprises benefit significantly, enabling them to channel saved capital back into operations, production, or innovation—amplifying their competitiveness.

6. Documents and Compliance

To file for the refund, enterprises typically submit documentation tailored to business type and project stage. Core documents include:

• Declaration form
• Chartered Accountant certification
• Udyam/Acknowledgement, HUM Registry forms
• Mutation or land record documents
• Map, Nakl Aks, Shajra details
• Tehsildar certificate for stamp duty payment
• First sale invoice or bill of sale
• Board resolution or Power of Attorney

Accurate documentation is crucial—missing or incorrect papers can cause delays or disqualification.

7. Application Process Workflow

1. Due Diligence and Planning
• Acquire land, verify block classification, obtain necessary land use approvals.
• Plan to begin production within five years.
2. Production Commencement
• Begin commercial operations.
• Retain documentation, especially the proof of production start.
3. Filing Application (within 3 months)
• Prepare and submit the application with all required documents to the designated department or agency.
4. Verification & Sanctioning
• Authorities validate the enterprise’s eligibility and documentation.
• After evaluation, the refund is sanctioned.
5. Refund Disbursement
• Once approved, the stamp duty refund is released to the enterprise, usually via bank transfer or through official refund channels.

Timely preparation and tracking are essential—both for production and application phases.

8. Potential Challenges

While beneficial, the scheme requires proactive management to fully leverage:

• Strict Deadlines
  Missing either the five-year production window or the three-month application window can nullify eligibility.
• Document Complexity
  The array of required certificates and records demands thorough administrative support.
• Understanding Block Categories
  Misclassification (e.g., confusing block type) could result in incorrect entitlements.
• Capital Intensity
  Upfront land costs may still strain cash flow; planning is critical.
• Monitoring and Coordination
  Some units may need support from consultants or firms like Advice Consultant to streamline paperwork and navigate state offices effectively.

9. Advice Consultant’s Role

Advice Consultant, leveraging its team of legal professionals, chartered accountants, retired government officials, and analysts, provides comprehensive assistance to enterprises. Their efforts include:

• Clarifying eligibility based on industry and location
• Preparing accurate documentation aligned with scheme requirements
• Guiding entrepreneurs through deadlines and submission checkpoints
• Addressing queries and facilitating efficient refund processing
• Their expertise reduces bureaucratic complexity and improves the likelihood of successful refunds.