Andhra Pradesh Internet of Things(IoT) Policy

India can play a pivotal role in the development of the global IoT ecosystem, both as a market and as an IoT hub. The government of India aims to create a US$ 15 billion IoT industry by 2020. A range of initiatives that will be taken under the Smart City and Digital India programmes will all help to boost the IoT industry.

Keeping this in view, the state has launched a pragmatic, proactive and a first-of-its-kind policy – the Andhra Pradesh Internet of Things (IoT) Policy 2016-2020. This will help to establish the state as an IoT hub by 2020, a perfect destination for IoT businesses.

Fiscal Incentives:

Common applicable incentives across all 5 segments:

  1. Lease Rentals: Reimbursement of 50% of Lease Rentals paid to the IoT Hub/ infrastructure provider, for leasing IoT office space, subject to a maximum of Rs.10 lakhs per annum, for a period of THREE years, linked to the employment generated @ 100sft per employee.
  2. Bandwidth/Connectivity: Reimbursement of 25% of Bandwidth/Connectivity (Internet charges) paid to Internet Service Providers, subjectto a maximum of Rs.15 lakhs per annum, for a period of THREE years from the date of starting commercial production/operations.
  3. Meter Conversion: Applicability of Industrial Power Category Conversion, subject to the condition that meter/power service connection shall be in the name of respective IoT entity.
  4. Power Subsidy: Reimbursement of fixed power cost to IoT entity @ Re.1/- per unit consumed for a period of 5 years from the date of commencement of commercial operations subject to the condition that meter/power service connection shall be in the name of the respective IoT entity.
  5. Electricity duty: 100% Reimbursement from Electricity duty, to IoT entity, for a period of 5 years, subject to the condition that meter/power service connection shall be in the name of the IoT entity.
  6. Stamp Duty: 100% reimbursement of the Stamp Duty, Transfer Duty and Registration Fee paid by the respective IoT entity to the Sub /Registrar, Registration & Stamps Department, on rental/lease premium/ lease deeds on the first transaction and 50% thereof on the second transaction (expansion).
  7. Skill Up gradation & Training: 50% reimbursement of the cost incurred subject to a maximum of Rs.10, 000/- per employee for providing skill gap trainings to the employees of AP domicile.

Segment Wise:

Segment Applicable Fiscal Incentives
IOT R&D 1.       Reimbursement of  Patent Filing Costs & Quality Certifications– actual expenditure incurred on the same subject to a maximum of Rs. 5 lakh in each case .

2.       Capital/Investment Subsidy: 10% of total investment upto subject to a maximum of Rs. 3 crores. (such as building, plant, machinery, testing equipment, etc)

IoT Lab / Assembly / Systems Integration 1.       Interest Rebate:5% for a period of 7 years (subject to maximum of Rs.1 crore per annum )

2.       Capital/Investment Subsidy: 10% of total investment upto subject to a maximum of Rs. 2 crores. (such as building, plant, machinery, testing equipment, etc)

3.       VAT/ CST Reimbursement: 100% tax reimbursement on VAT/CST for a period of 10 years subject to a maximum of 100% of fixed capital investment other than land (such as building, plant, machinery, testing equipment, etc)

IOT Device & Hardware

Manufacturer

1.       Interest Rebate: 5% for a period of 7 years (subject to maximum of Rs.1 crore per annum )

2.       Capital/Investment Subsidy: 10% of total investment upto subject to a maximum of Rs.5 crores. (such as building, plant, machinery, testing equipment, etc).

3.       Subsidy on Cleaner/Greener Production: 25% subsidy on cleaner/ green production measures limited to Rs.10 Lakhs.

4.       VAT/ CST Reimbursement: 100% tax reimbursement on VAT/CST for a period of 10 years subject to a maximum of 100% of fixed capital investment other than land (such as building, plant, machinery, testing equipment, etc)

IoT Software

Applications &

Analytics

5.       VAT/ CST Reimbursement: 100% tax reimbursement on VAT/CST for a period of 10 years subject to a maximum of 100% of fixed capital investment other than land (such as building, plant, machinery, testing equipment, etc)
IOT Hubs and

Infrastructure

1.       50% Reimbursement of Property Tax proportionate and limited to the built up IoT office space, rented/leased to an IoT unit/entity

2.       50% Reimbursement of Insurance Premiumpaid towards the insurance of the Building, proportionate and limited to the built up IT office space rented/leased to the IoT units/entity.

3.       50% Reimbursement of facility maintenance chargespaid to the Facility Management Companies, proportionate and limited to the built up IT office space rented/leased to the IoT units/entities, subject to a maximum of Rs.5 lakhs per annum.

4.       50% Reimbursement of one time cost creating common infrastructurelike Conference hall with equipment such as projection/audio/video systems, Server room, Cafeteria etc. for the entire IOT Hub/IoT facility,  subject a maximum of Rs.10,00,000/- .

5.       Reimbursement of 10% of the total interest paid on the loan obtained from any financial institution, for Construction of IoT

6.       Hub/IoT facilities for initial two years subject to a maximum of Rs. 5 lakhs.

Non-fiscal Incentives:

Applicable to all IoT entities:

IoT entities and non-hazardous electronic hardware manufacturing entities to be exempted from the purview of the AP Pollution Control Act except in respect of power generation sets time limit prescribed for the issue of such clearances by the APPCB under the “Ease of doing business “.

Objectives

  • To achieve a sizeable IoT market, which is atleast 10 per cent of the Indian market, i.e., US$ 1.5 billion?
  • To create at least 50,000 direct employment opportunities in the IoT vertical, which could generate another 1,50,000 indirect jobs in other support sectors, such as, logistics (transport/administration/finance),hospitality(tourism/recreation/leisure/entertainment) and facilities management (construction/maintenance/services?)
  • To promote 10 IoT hubs with government and private sector participation
  • To attract 100 IoT companies/units/entities to set up their facilities/ operations/development centres in Andhra Pradesh
  • To create a world-class ecosystem for the growth of IoT units/entities in the state- through the promotion of IoT hubs
  • To develop state-of-art IoT infrastructure—both physical and technical—of international standards in all major towns in the state.
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“One lakh new IT jobs for the youth will be created in the state within a couple of years. Five lakh jobs would also be created in the electronics, manufacturing sectors etc. “

Shri Nara Lokesh
Minister , Information Technology

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