Maharashtra Package Scheme of Incentives (PSI) – A Complete Guide

Unlock Subsidies, Drive Investments, Boost Growth: A Guide for MSMEs

The Maharashtra Package Scheme of Incentives (PSI) is one of the most attractive state-level industrial promotion schemes in India. It aims to encourage balanced industrial development. PSI offers subsidies, tax refunds, and financial incentives to eligible manufacturing units, MSMEs, and mega projects.

At DP Jadhav & Co., we specialize in helping businesses understand, apply for, and maximize benefits under PSI.

What is the PSI Scheme?

The Package Scheme of Incentives (PSI) is notified by the Government of Maharashtra’s Industries Department. It provides a framework of fiscal and non-fiscal incentives to encourage investment across different regions of Maharashtra.

Goals of the PSI Scheme

The scheme promotes:

• Balanced industrial growth in backward and less-developed districts.

• MSME promotion by offering subsidies and financial support.

• Large and mega project development with customized incentives.

• Employment generation and regional development.

  
  

Eligibility Criteria

To qualify for the PSI scheme, businesses must meet certain criteria:

• Type of Entities: MSMEs, Large-scale units, Mega projects, Ultra Mega projects.

• Sector Coverage: Manufacturing, Agro & Food processing, Biotechnology, Engineering, Breweries & Distilleries, Textiles, Electronics, Renewable Energy, etc.

• Location: Benefits vary by taluka/district classification (Developed, Underdeveloped, Aspirational, Naxal-affected, etc.). Backward regions receive higher incentives.

• Commencement: The unit must commence production within the time period specified in the eligibility certificate.

  
  

Key Incentives & Benefits under PSI

1. Industrial Promotion Subsidy (IPS):

2. Reimbursement of a percentage of SGST paid (state GST) on sales.

4. Typically 40–100% of SGST paid, depending on region and category.




5. Stamp Duty Exemption:

7. Waiver or refund of stamp duty on land purchase or lease for industrial use.




8. Electricity Duty Exemption:

10. Exemption for a defined period (up to 15 years) depending on region.




11. Interest Subsidy:

13. Interest subsidy on term loans for MSMEs, usually 5–7% up to a prescribed limit.




14. Power Tariff Subsidy:

16. Rebate (₹1–2 per unit) on power tariffs for eligible MSMEs.




17. Employment Generation Subsidy:

19. Linked to the number of local persons employed.




20. Other Incentives:

22. Freight subsidy, quality certification assistance, patent registration support, and training subsidies.

PSI Incentives by Regional Classification

Under the Maharashtra Package Scheme of Incentives (PSI), benefits vary significantly based on the taluka/district category. The further back the region, the higher the incentives.

| Region Category | Examples | Industrial Promotion Subsidy (IPS – % of SGST Refund) | Electricity Duty Exemption | Stamp Duty Exemption | Interest Subsidy (MSMEs) | Power Tariff Subsidy |

|------------------|----------|------------------------------------------------------|--------------------------|----------------------|--------------------------|----------------------|

| A (Highly Developed) | Mumbai, Pune City, Thane | ❌ Not eligible (no IPS) | ❌ Not eligible | ❌ Not eligible | ❌ Not eligible | ❌ Not eligible |

| B (Developed) | Navi Mumbai, Pune District (semi-urban) | 30–40% of SGST paid | ❌ Not eligible | Partial refund | 3–5% (up to limit) | ❌ Not eligible |

| C (Moderately Developed) | Nashik (urban), Aurangabad City | 40–50% of SGST paid | Up to 7 years | Stamp duty exemption (partial) | 5% for 5 years | ₹1/unit for 3 years |

| D (Less Developed) | Jalna, Dhule (part), Satara (part) | 60–70% of SGST paid | Up to 10 years | 100% exemption | 5–7% for 7 years | ₹1.50/unit for 5 years |

| D+ (Least Developed) | Gadchiroli, Hingoli, Wardha | 80–100% of SGST paid | Up to 15 years | 100% exemption | 7% for 7 years | ₹2/unit for 7 years |

| Naxal Affected Areas | Gadchiroli (specific blocks) | 100% of SGST paid | 15 years | 100% exemption | 7% for 10 years | ₹2/unit for 10 years |

📌 Notes

• IPS (Industrial Promotion Subsidy) is usually linked to the SGST paid on sales; refund is capped by project size and category.

• MSMEs get additional priority for interest subsidy and power tariff rebate.

• Large, Mega, and Ultra-Mega Projects may negotiate customized incentive packages beyond these standard slabs.

• A & B regions (developed belts like Mumbai, Pune) have minimal or no benefits under PSI to encourage investment in backward regions.

  
  

✅ Why This Matters

Choosing the right location can change the incentive package drastically. For example:

• A project in Category C (Nashik city) may get ~40–50% SGST refund.

• The same project in Category D+ (Wardha) may get 100% refund + 15 years electricity duty exemption + power subsidy.

  
  

Timeline

• Application Filing: At project setup or expansion stage.

• Eligibility Certificate: Typically 3–6 months after verification.

• Subsidy Claims: Annually or quarterly depending on incentive type.

  
  

Why Choose DP Jadhav & Co.?

• Specialized Expertise in PSI, MOOWR, and subsidy consulting.

• Hands-on Industry Knowledge – 16+ years in finance & cost accounting.

• Proven Results – Helped clients secure crores in state VAT/GST refunds under past PSI versions.

• End-to-End Support – From eligibility study to claim filing and audits.

  
  

Get Started with PSI

Maximize state incentives and reduce project costs with our PSI consulting services.

👉 Contact us at contact@dpjadhav.com | ☎️ +91 9623774684

Frequently Asked Questions (FAQs) on the Maharashtra PSI Scheme

The Package Scheme of Incentives (PSI) is the flagship industrial promotion policy of the Government of Maharashtra. It provides financial subsidies, tax refunds, and concessions to encourage industries to set up or expand within the state. Incentives include SGST refunds, stamp duty exemption, electricity duty waiver, interest subsidies, and power tariff rebates, varying by location and project size.

Eligibility depends on:

• Type of Unit – MSMEs, Large Units, Mega & Ultra-Mega Projects.

• Sector – Manufacturing, Agro-processing, Biotechnology, Engineering, Food & Beverages, Textiles, Breweries & Distilleries, Renewable Energy, etc.

• Location – Benefits depend on whether the unit is in Category A, B, C, D, D+, No-Industry Districts (NID), or Naxal-affected areas.

  
  

What are IPS (Industrial Promotion Subsidies)?

Industrial Promotion Subsidy (IPS) is the core benefit under PSI, offered as a refund of State GST (SGST) paid on sales.

• IPS percentage ranges from 30% to 100% depending on the project location.

• The refund is available for a fixed period (7–15 years) or until a specified subsidy ceiling is reached.

  
  

How much SGST refund can I claim?

The refund percentage depends on the region category:

• Category B → ~30–40% of SGST paid

• Category C → ~40–50%

• Category D → ~60–70%

• Category D+ / NID / Naxal Areas → up to 100% refund

  
  

The actual refund is subject to ceilings and limits specified in the eligibility certificate.

Which regions get the highest PSI benefits?

The highest incentives are provided to:

• Category D+ regions

• No-Industry Districts (NID)

• Naxal-affected areas

  
  

These regions enjoy 100% SGST refund, 15 years electricity duty exemption, 100% stamp duty waiver, and higher power tariff subsidies.

PSI primarily targets manufacturing units. However, certain service-related activities linked to manufacturing (e.g., IT-enabled manufacturing services, R&D centers, logistics hubs supporting industrial operations) may qualify in special cases. Pure service industries (like IT services alone) generally do not qualify.

• Application for Eligibility Certificate (EC): Usually within 1 year of commercial production.

• Issuance of EC: Typically 3–6 months after verification by the District Industries Centre (DIC).

• Subsidy Claims: Can be filed annually or quarterly (depending on subsidy type) after production starts. Claims are processed by DIC and then disbursed by the Industries Department.

  
  

Can PSI be combined with central schemes (MOOWR, PLI)?

Yes. PSI benefits can be availed along with central schemes like MOOWR (duty deferment), PLI (production-linked incentives), EPCG, and GST input credits, provided there is no double claiming of the same benefit. For example, SGST refund under PSI is separate from customs duty deferment under MOOWR.