Economy

Startup India: Are you eligible for Benefits?

By Swapnil Bansal

Posted on July 8, 2016

Under the leadership of Prime Minister Shri Narendra Modi, Indian government launched an ambitious scheme “Startup India” to promote entrepreneurship in the country. Various government departments are provisioning for the scheme in their procedures and policies. Below are some key parameters to check whether you are eligible for Startup India scheme benefits:

Startup Definition:

• A private limited company or registered partnership firm or limited liability partnership until 5 years from the date of incorporation,
• Whose turnover does not exceed Rs. 25 Crores in any financial year,
• Promotes Innovation, development, implementation of new products, services or processes driven by use of technology or Intellectual property and
• Obtained a certificate for eligibility from the Inter Ministerial Board of Certification.

Any proprietorship firm or entity formed by splitting existing business will not be covered under the scheme. Although existing entities meeting above criteria can apply for recognition.

Innovation here means your product or service should be either new or one which adds significant value to customers as compared to existing product

Certificate of Eligibility

In order to obtain a certificate of eligibility, authorized representative of the organization shall apply using the website or mobile app of the department of Industrial Policy and Promotion.

Application requires following details:

• Nature of your Entity
• Name of your Entity
• Incorporation Details
• PAN
• Address
• Name and Contact details of Authorized Representative
• Name and Contact details of Directors/Partners.

Supporting Documents and Self Certification

• Nature of Recommendation
  • Recommendation from any incubator established in Post graduate college in India.
  • Letter of Support from any incubator funded by Central/State government.
  • Recommendation from any incubator authorized by Central Government.
  • Letter of funding support from SEBI registered Incubator/Private Equity Fund/Angel Investor etc.
  • Letter of funding from Central/state government
  • Patent published in the journal of the Indian Patent Office

• Incorporation/registration certificate

Recommendation letter should be prepared as per the format specified by the Department of the Industrial Policy and Promotion. These documents must be self attested and by submitting the application you agree that you qualify for the eligibility terms mentioned in Definition of Startup.

The application is evaluated by the Inter Ministerial Board and accordingly the tax and IPR related benefits are allowed.

This certificate will cease on:

• 5 years from the date of incorporation/registration or
• If turnover in any financial year exceeds Rs. 25 crore.

The biggest surprise is the guideline which says that the certificate of recognition has to be issued within one working day upon successful submission of application with necessary documents. Such a timeline is ambitious and sets a benchmark for transparency and good governance.