Reviewed by Ashish Shah, Managing Director18 October 202616 min readSource: MSME GR dated 25.09.2026
GR No. IMD/
On this page
Download the GR: IMD/WRT/e-file/9/2026/2630/CH (PDF)
The MSME GR runs to 32 pages. Our copy is the Department’s scanned resolution with a machine-read text layer added, so you can search it (Ctrl+F or ⌘F); the page images are unchanged, and any figure you copy out should be checked against the page itself. Two related VGIP 2026 resolutions are alongside.
Scheme for assistance to MSMEs
GR No. IMD/The GR summarised on this page: definitions, rates, ceilings, certificates, EPF and the other assistance. Text-searchable copy.
Download PDFScheme for Assistance to Large, Mega and Ultra Mega Industries
GR No. IMD/Units above ₹125 crore in plant and machinery: incentive matrices, registration and PEC/FEC rules. Text-searchable copy.
Download PDFCategory-wise classification of talukas
GR No. IMD/The 130 Category A and 138 Category B talukas that decide which rate column applies. E-signed original.
Download PDFOfficial source. The Industries & Mines Department publishes all three resolutions on its Government Resolutions page. If a figure here and the GR ever differ, the GR governs — and please tell us.
The GR at a glance
- GR number and date
- IMD/
WRT/ e-file/ 9/ 2026/ 2630/ CH, dated 25 September 2026, issued from Sachivalaya, Gandhinagar with the Finance Department’s concurrence of 24 August 2026. - Scheme
- Viksit Gujarat Industrial Policy-2026 — Scheme for assistance to MSMEs, in force from 1 June 2026 to 31 May 2031.
- Who it covers
- New manufacturing MSMEs, and existing ones that expand or diversify, with up to ₹125 crore of plant and machinery across all units (paras 1.2, 2.1).
- What it replaces
- The Aatmanirbhar Gujarat Scheme for Assistance to MSMEs, GR MIS-102022-1271(1)-I(Ch) dated 05.10.2022 — still open through the option in para 4.1.
- Who sanctions
- Capital, interest and power tariff subsidy and EPF: the General Manager of the District Industries Centre (GM-DIC) for micro and small units, the MSME Commissioner for medium units (para 23.2).
- How it is laid out
- 26 paragraphs: definitions (1), eligibility and investment period (2–3), incentives and conditions (4–5), certificates (6), EPF (7), other assistance (8–18), thrust sectors (19), sunset and conditions (20–22), administration (23–26).
Who the MSME GR covers
The GR applies to an enterprise — a company, partnership or LLP, society, trust, industrial co-operative or proprietary concern — engaged in the manufacture, production, processing or job work of articles (para 1.1). Its size class is measured on gross fixed capital investment in plant and machinery, counted across all its units in the country (para 1.2):
- Micro — up to ₹2.5 crore.
- Small — above ₹2.5 crore, up to ₹25 crore.
- Medium — above ₹25 crore, up to ₹125 crore.
The class is fixed on the date the project is completed (para 3.3). An enterprise above ₹125 crore is covered by the Large, Mega and Ultra Mega GR instead — see how the new MSME limits work.
New units, expansions and diversifications
- New enterprise (para 1.3): Udyam Registration, a Letter of Intent or Approval, an IEM (new or amended), MCA21 for the project or another Government of India licence; separately identifiable fixed capital investment and separate books of account. An expansion or diversification at a different premises is treated as a new unit.
- Expansion (para 1.5): gross fixed capital investment (excluding land) up by at least 50% at the same premises, at least 60% of it in plant and machinery, and installed capacity up by at least 50% — after at least 75% use of the existing capacity in any one of the three preceding financial years. It qualifies only one year after the existing unit’s project completion or DoCP, whichever is later. The separate test for micro enterprises repeats the 50%, 60% and 50% conditions without the 75% one.
- Diversification (para 1.6): investment up by at least 25% for micro and small enterprises, or 50% for medium ones, at the same premises, with at least 60% in plant and machinery.
- An enterprise remains eligible for expansion or diversification only while it is still an MSME (para 2.4), and incentive already taken on the same GFCI under another State scheme rules it out (para 2.2).
What counts as EFCI — and what does not
Eligible fixed capital investment (EFCI, para 1.11) is what the enterprise acquires and pays for within the eligible investment period:
- Buildings at actual cost or the Roads & Buildings Department’s Schedule of Rates, whichever is lower — but buildings for plant, R&D, testing, storage and other manufacturing use at actual cost. Building on own land, a GIDC plot or land leased or rented for the incentive period counts, as do constructed GIDC sheds; old buildings and repairs do not. Compound walls, internal roads, bore wells, tanks and internal pipelines count at actual cost.
- Plant and machinery with transport, foundation, erection and electrification (including the substation and transformer), plus a captive power plant inside the premises, in-plant vehicles and material handling, water treatment or desalination, and pollution control. Technology, designs and patents count up to 10% of EFCI in plant and machinery; DG sets up to 50% of connected load or 5 MW, whichever is less.
- Project-related infrastructure — staff housing, a feeder road, pipelines, the non-refundable DISCOM deposit, training centres, worker buses and similar items — at 50% of actual cost.
- Not counted (para 1.12): land and land development, working capital, goodwill, royalty, preliminary and pre-operative expenses, second-hand plant and machinery (indigenous or imported), capitalised interest, rented or leased assets including buildings, power plants other than for captive use within the premises, renewable plants for third-party sale or non-captive use, and design, consultancy, supervision or inspection fees without technology acquisition.
The investment window and term loans
Assets must be acquired and paid for from 1 January 2026 (para 3.2), and commercial production must start between 1 June 2026 and 31 May 2031 (para 3.1). After the date of commercial production — the date of the first commercial sale bill (para 1.9) — the window stays open for 12 months where gross fixed capital investment in plant and machinery is up to ₹50 crore, and 18 months above ₹50 crore up to ₹125 crore. Term loans count from RBI-recognised banks and financial institutions, external commercial borrowings and government institutions such as NDDB, GSFS, HUDCO, REC and PFC — only the amount disbursed in the investment period — and loans from NBFCs do not count (para 1.8). More on why the DoCP date matters.
Aatmanirbhar Gujarat or VGIP 2026: the option
- In commercial production before 1 June 2026: the previous scheme only — the Aatmanirbhar Gujarat Scheme for Assistance to MSMEs of 5 October 2022.
- Not in production before 1 June 2026: either scheme. To take the previous one, the enterprise must apply and exercise the option within six months of this GR — by 25 March 2027 — and start production on or before 4 October 2027. The option is final and irrevocable.
- After the six months: every application is considered under VGIP 2026 only, with investment counted from 1 January 2026.
Which scheme pays more depends on the project; we compare both in the six-month option window, explained.
Capital, interest and power tariff subsidy rates
An MSME may take any one of the three components or any combination, keeping within each component’s own cap and the combined ceiling for its taluka category; the incentives are paid over five years from DoCP. Category A talukas get the higher capital subsidy, power tariff rate and ceilings. The category comes from the taluka GR of 8 September 2026 (para 1.14); where a project spans more than one taluka, the taluka holding the largest share of its land decides. Look yours up in the VGIP 2026 taluka list.
Swipe sideways to see every column
| Component | Category A | Category B |
|---|---|---|
| Capital subsidy | Micro: 35% of EFCI, paid in year 1 Small and medium: 35% of EFCI over 5 years | Micro: 25% of EFCI, paid in year 1 Small and medium: 25% of EFCI over 5 years |
| Interest subsidy | 7% a year on the term loan for 5 years, up to 10% of EFCI | 7% a year on the term loan for 5 years, up to 10% of EFCI |
| Power tariff subsidy | ₹2 per unit for 5 years, up to 25% of EFCI | ₹1 per unit for 5 years, up to 25% of EFCI |
| Combined ceiling | 45% of EFCI over 5 years | 35% of EFCI over 5 years |
| Annual ceiling, small and medium | 9% of EFCI | 7% of EFCI |
| Annual ceiling, micro | 37% in year 1, then 2% a year | 27% in year 1, then 2% a year |
Swipe sideways to see every column
| Component | Category A | Category B |
|---|---|---|
| Capital subsidy | Micro: 35% of EFCI, paid in year 1 Small and medium: 35% of EFCI over 5 years | Micro: 30% of EFCI, paid in year 1 Small and medium: 30% of EFCI over 5 years |
| Interest subsidy | 7% a year for 5 years, up to 20% of EFCI | 7% a year for 5 years, up to 20% of EFCI |
| Power tariff subsidy | ₹2 per unit for 5 years, up to 20% of EFCI | ₹1 per unit for 5 years, up to 20% of EFCI |
| Combined ceiling | 50% of EFCI over 5 years | 45% of EFCI over 5 years |
| Annual ceiling, small and medium | 10% of EFCI | 9% of EFCI |
| Annual ceiling, micro | 38% in year 1, then 3% a year | 33% in year 1, then 3% a year |
- One percentage point more interest subsidy for women entrepreneurs, registered start-ups in manufacturing and first-generation entrepreneurs — within the same ceilings.
- No carry-forward: an amount cut by the annual ceiling is lost, not paid later.
- Renewable power bought through open access qualifies for the power tariff subsidy; captive power does not.
Worked example: where the annual ceiling bites
Example, with round figures. A small enterprise with ₹10 crore of EFCI in a Category B taluka, general sector, takes capital subsidy of 25% — ₹2.5 crore, paid at ₹50 lakh a year for five years. Its annual ceiling is 7% of EFCI, or ₹70 lakh, so interest and power tariff subsidy together can add only ₹20 lakh a year. Over five years it collects at most ₹3.5 crore: exactly the 35% combined ceiling. The same project in a Category A taluka collects ₹70 lakh a year of capital subsidy plus up to ₹20 lakh of the others within its 9% annual ceiling — ₹4.5 crore, or 45%.
A micro enterprise with ₹2 crore of EFCI in Category B receives its whole capital subsidy, ₹50 lakh, in year 1. The 27% year-1 ceiling leaves ₹4 lakh for interest and power that year, and the 2% ceiling ₹4 lakh in each of years 2 to 5: ₹70 lakh in all, again 35%.
Both examples assume the interest and power tariff claims are large enough to fill the room under each annual ceiling; the sanctioning authority fixes the actual amounts after asset verification. How to choose the mix: the VGIP 2026 combined ceiling.
Conditions on the three subsidies
- Central schemes stack, up to EFCI. An MSME may also take Government of India incentives. If it takes a central capital subsidy, the State reduces its own capital subsidy so that capital, interest and power tariff incentives from both governments stay within EFCI (para 5.1(b)); in any case, total State and central incentives may not exceed EFCI (para 5.4(c)).
- Interest subsidy is paid on interest levied on term-loan amounts actually disbursed for EFCI within the investment period — not on penal interest or other charges, and not for any period of default under RBI norms. The enterprise must bear at least 2% interest itself, even after any Government of India interest subsidy (para 5.2).
- Power tariff subsidy covers power from the DISCOM, or renewable power through open access, billed in the enterprise’s name — not power from its own captive plant. An expansion or diversification claims only its additional consumption, on a sub-meter; a micro enterprise without one is measured against its average consumption of the past three years (para 5.3).
- Claims open after the certificate. Interest and power tariff subsidy can be claimed only once the Provisional or Final Eligibility Certificate is issued (paras 5.2(a), 5.3(e)).
- Gujarat jobs. At least 85% of all employees, and at least 60% of managerial and supervisory staff, must be domiciled in Gujarat (para 5.4(a)).
- Other conditions: a GPCB certificate as applicable; no incentive for renovation, rehabilitation or rationalisation; and production must continue through the incentive period, though the sanctioning authority may condone a stoppage beyond the management’s control (paras 5.4, 22).
Deadlines: PEC, FEC and the sunset clause
Provisional Eligibility Certificate (PEC)
Apply within six months of DoCP, or within six months of the GR’s date, whichever is later (para 6.1). The PEC is issued for 40% of EFCI as at DoCP (para 6.6).
DoCP before 25 September 2026: the deadline is 25 March 2027Final Eligibility Certificate (FEC)
If the whole investment is complete on DoCP or within the investment period, you may apply directly for the FEC instead of a PEC — within six months of completion or of the GR’s date, whichever is later. If it is not complete within the investment period, apply within six months of the period’s last date (paras 6.2–6.4). Missing the PEC deadline means applying straight for the FEC within its own time limit (para 6.5).
Six months from completion, or from the end of the investment periodLate applications
An FEC application filed after the six months but within two years is a delayed submission: the incentive period and amount are cut in proportion to the delay (para 21.2). Under para 21.3, no FEC application is entertained beyond two years from the date of the eligible investment period.
Every month late shortens the claim
Breach means recovery with interest. If any condition of the GR is breached, the incentives paid can be recovered as arrears of land revenue with interest at 18% a year from the date of first availment (para 22.4). The MSME Commissioner may also issue separate implementation guidelines (para 22.5).
EPF reimbursement
For five years from DoCP, the State reimburses 100% of the employer’s statutory EPF contribution for new employees working in Gujarat, capped per employee at the lower of 12% of basic pay plus dearness and retaining allowance, or ₹1,800 a month for a male employee, ₹2,500 for a woman employee and ₹3,000 for a specially abled employee (para 7.2).
- A new employee is one who had no Universal Account Number before joining and joins within the five years from DoCP (para 7.3(b)).
- An expansion or diversification claims only for headcount above the level before the expansion (para 7.3(a)).
- Reimbursement may be made quarterly, against the employer’s payment receipts (para 7.3(c)).
- EPF reimbursement taken under any other central or state scheme rules this one out for that period (para 7.3(d)).
Other assistance in the MSME GR
Swipe sideways to see every column
| Assistance | What the GR pays | Para |
|---|---|---|
| ERP system | 65% of the capital cost — installation, software and annual service, or the SaaS subscription; hardware excluded — up to ₹1 lakh | 8.1 |
| Quality certification | 50% of the certification fee and 50% of testing equipment for it, up to ₹10 lakh in all; not for statutory certification or renewals | 8.2 |
| ZED certification | 50% of the charges left after Government of India assistance, up to ₹50,000 | 9 |
| ICT, Industry 4.0 and AI equipment | 65% of the capital expenditure, up to ₹5 lakh | 10 |
| Technology acquisition | 65% of the cost, including royalty for the first two years, up to ₹50 lakh; not for plant or equipment | 11 |
| Patent registration | 75% of the cost, up to ₹25 lakh per applicant; attorney fees capped at ₹50,000 (domestic) and ₹2 lakh per country (international) | 12 |
| Energy and water saving | 75% of an energy or water audit, up to ₹50,000 each; 25% of the recommended equipment, up to ₹20 lakh, if it saves at least 10% of the previous 12 months’ average monthly consumption | 13 |
| Listing on an SME exchange | 25% of the cost of raising equity, up to ₹5 lakh | 14 |
| CGTMSE fee (micro and small) | 100% of the annual service fee on a collateral-free term loan, for five years | 15 |
| Power connection charges | 35% of DISCOM charges for an LT/HT service line, up to ₹5 lakh, outside GIDC estates and approved parks | 16 |
| Rent (micro and small) | 65% of the rent on a leased shed — 75% for a 100% women-owned enterprise — up to ₹3 lakh a year for five years | 17 |
| Electricity duty | Exemption as applicable under the Gujarat Electricity Duty Act, 1958 — see electricity duty exemption | 18 |
Most of these must be claimed within six months of the event that triggers them — installation, certificate, agreement, patent publication, audit report, listing, payment or rent deed; the CGTMSE claim follows the PEC/FEC time limits. ZED, ICT, energy and water, power connection and rent are sanctioned by the GM-DIC; ERP and quality certification, technology, patents and the SME exchange by the MSME Commissioner (para 23.2).
Extra assistance for selected thrust sectors
Makers of sports goods and equipment, toys, footwear, robots and drones (para 1.15) claim under the para 4.3 table above: higher combined and annual ceilings, an interest cap of 20% of EFCI and 30% capital subsidy in Category B — though the power tariff cap is 20% of EFCI rather than 25%. They also get seven further heads of assistance, sanctioned by the MSME Commissioner, most of them for expenditure from 1 January 2026:
- Stamp duty and registration charges: 100% reimbursement on land bought or leased for the project within the eligible investment period, paid after commercial production starts; apply within six months of DoCP. The reimbursed amount is not part of EFCI.
- Intellectual property — patent, design, copyright, trademark and GI registration: 75%, up to ₹1 crore.
- Technology acquisition: 65%, up to ₹1 crore.
- International certification: 100% of the fees, up to ₹5 crore.
- Training: up to ₹8,000 per employee per month for the first 12 months, for trainees domiciled in Gujarat; claimable once.
- Creative design studio: 50% of machinery, hardware and software, up to ₹5 crore.
- AI subscriptions: 80% of the fees, up to ₹1 lakh a year for three years, for micro enterprises and artisans.
The Large unit and taluka GRs: 2320/I and 2211/I
Two related resolutions sit alongside the MSME GR; both are in the download cards above.
- GR No. IMD/
WRT/ — the Scheme for Assistance to Large, Mega and Ultra Mega Industries, for the same 1 June 2026 to 31 May 2031 period. It covers enterprises with more than ₹125 crore in plant and machinery, and thrust-sector Mega projects (at least ₹1,000 crore of investment and 250 direct jobs, plus 50 jobs for every further ₹200 crore) and Ultra Mega projects (at least ₹10,000 crore and 3,000 jobs, plus 500 for every further ₹5,000 crore). Unlike the MSME GR, it requires registration with the Industries Commissioner before DoCP or within three months of the GR — by 8 December 2026 — whichever is later: the registration deadline, explained.e-file/ 9/ 2026/ 2320/ I dated 08.09.2026 - GR No. IMD/
HMR/ — the taluka classification, placing Gujarat’s 268 talukas in Category A (130) or Category B (138). The MSME GR cites it as IMD/e-file/ 9/ 2026/ 2211/ I dated 08.09.2026 HRM/ e-file/ 9/ 2026/ 2211/ I; the taluka GR itself reads HMR. See every taluka’s category.
MSME scheme GR: frequently asked questions
What is GR No. IMD/WRT/e-file/9/2026/2630/CH?
It is the Government of Gujarat Industries & Mines Department resolution dated 25 September 2026 that notifies the Viksit Gujarat Industrial Policy-2026 Scheme for assistance to MSMEs. It sets the capital, interest and power tariff subsidies, EPF reimbursement and other assistance for manufacturing MSMEs that start commercial production between 1 June 2026 and 31 May 2031.
Where can I download the VGIP 2026 MSME scheme GR PDF?
From the download card on this page, which links to a text-searchable copy of the 32-page GR, or from the Government Resolutions page of the Industries & Mines Department at imd.gujarat.gov.in, which publishes the original.
Does the MSME GR apply to a unit with more than ₹125 crore in plant and machinery?
No. Para 1.2 limits it to enterprises with up to ₹125 crore of gross fixed capital investment in plant and machinery across all their units. Larger units fall under the Large, Mega and Ultra Mega GR, No. IMD/WRT/e-file/9/2026/2320/I dated 8 September 2026.
By when must an MSME apply for the Provisional Eligibility Certificate?
Within six months of the date of commencement of commercial production, or within six months of the GR’s date — by 25 March 2027 — whichever is later (para 6.1). A late FEC application filed within two years is accepted with a proportionate cut in the incentive (para 21.2).
Can a new MSME still choose the Aatmanirbhar Gujarat Scheme instead?
Only if it had not started commercial production before 1 June 2026, exercises the option within six months of the GR — by 25 March 2027 — and starts production on or before 4 October 2027. The choice is final and irrevocable (para 4.1).
Which sectors are selected thrust sectors in the MSME GR?
Sports goods and equipment, toys, footwear, robots and drones, plus any sector notified later (para 1.15). They get a combined ceiling of 50% of EFCI in Category A and 45% in Category B, and the extra assistance in para 19.
Is the power tariff subsidy ₹2 or ₹1 per unit?
₹2 per unit in Category A talukas and ₹1 per unit in Category B, for five years, up to 25% of EFCI in general sectors and 20% in selected thrust sectors, within the combined ceiling (paras 4.2 and 4.3).
Want the GR read against your project?
Send us your plant and machinery figure, taluka and expected production date. We will tell you which paragraphs apply, which deadlines are running, and what each component can pay — before you file.
Written by the NeoApex Saver advisory team · Reviewed by Ashish Shah, Founder & Managing DirectorNeoApex Saver Pvt Ltd (formerly Apex Consultants) has filed Gujarat industrial incentive claims for over twenty years — 300+ projects, 99% filing success. Every figure in this article is taken from the Government Resolutions linked above; worked examples and the reading of grey areas are ours.Last reviewed 18 October 2026 · About the team · Report a correction