AP Information Technology Policy 2014-20 (Amended) - Operational Guidelines for implementation

GOVERNMENT OF ANDHRA PRADESH
ABSTRACT
ITE&C Department– IT Promotion - Administration of Incentives to the eligible IT/ITES
units/companies in Andhra Pradesh under the New/Expansion categories within the framework
of the AP Information Technology Policy 2014-20 (Amended) - Operational Guidelines for
implementation – Orders - Issued.

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INFORMATION TECHNOLOGY, ELECTRONICS & COMMUNICATIONS
(Promotions Wing) DEPARTMENT
G.O.MS.No.20 Dated: 16.11.2017
Read the following:
1. G.O.Ms.No.13, ITE&C (Promotions) Department, dated: 31.07.2010.
2. G.O Ms.No:13, ITE&C Dept, dated: 11.08.2014.
3. Go Ms. No: 24, ITE&C Dept, dated: 05.11.2016
4. Go Ms. No: 23, ITE&C Dept, dated: 05.12.2014.
5. Go Ms. No: 21, ITE&C Dept, dated: 22.09.2016.
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ORDER
 In order to achieve the objective of promotion of Information & Communications
Technology Sector as a prime growth engine for employment generation and overall socio
economic development of the State of Andhra Pradesh, Government after due consideration,
issued orders vide G.Os 1st to 4th read above.
2. Further to enable IT/ITES Industry to set up, sustain, function and grow their operations
in an investment-friendly, proactive, conducive and hassle free environment in the State, while
identifying specific Focus Areas, Government has also pronounced certain incentives and
facilitation measures in the said Andhra Pradesh IT Policy 2014-2020.
3. Government has issued orders including amendments vide G.O 5th read above to AP IT
Policy 2014-20 issued vide 2nd read above.
4. Taking into consideration the feed-back of IT/ITES Industry and in continuation of the
orders issued vide 5th read above, Government hereby issues the following operational guidelines for transparent administration of various incentives to the eligible IT/ITES industry/companies as applicable.
5. Operation Guidelines for disbursement of Incentives
I. Background
a. Andhra Pradesh Information Technology Policy 2014-20 herein after called ‘Policy’ to
encourage investments in the IT/ITeS sector in the state was notified vide G.O.Ms.No. 21
dated 22.09.2016.
b. As per the said notification, to provide ample clarity to the IT/ITES industry and for
effective functioning of the CCITI, the following guidelines are being laid down.
II. Definition
a. Applicant: Applicant for the purpose of the policy is a legal entity registered in India as
per companies act (1956 & 2013) that is;
i. Proposing to invest in a project under one of the verticals of Information
Technology and submitting Application (Proposal) for land.
ii. An existing IT/ITES unit in Andhra Pradesh applying for incentives under existing
AP IT policies 2014-2020.
b. Approved Project: Approved Project means a project approved by Information
Technology, Electronics and Communication (ITE&C) department, Government of
Andhra Pradesh under the policy based on an application.
c. Fiscal Incentive per Employment: Incentive claimed by IT/ITES units for employment
generation with the support of list of employees who are on rolls of the IT/ITES unit
(applicant) for more than 12 months at the time of submission of such claims.
d. Detailed Project Report: Detailed Project Report (DPR) for the purpose of the policy
means a report submitted by the applicant seeking approval for a land. The report should
be in a prescribed format containing requisite information along with supporting
documents.
e. Financial Year: Financial year begins on the 1st April of a year, and ends on 31st March of
the following year.
f. Project: Project under the policy would be a new business enterprise or expansion of an
existing enterprise which an applicant intends to implement as per an application
submitted under the policy. The business enterprise could be carried out at one or more
locations.
g. SEZ location: SEZ location means an area which is designated as Special Economic Zone
under the provisions of the Special Economic Zones Act, 2005 (28 of 2005) and rules
made there under.
h. Non-SEZ location: Non-SEZ location means an area which is not suitable within
designated SEZ area.
i. ITIRs: Information Technology Investment Regions means an area which is designated as
ITIRs under the provisions of GoI’s ITIRs Policy, 2008 and rules made there under.
j. Cost Accountant: The members of the Institute of Cost Accountants of India and having a
‘Certificate of Practice’ issued by the said institute.
k. Chartered Accountant: The members of the Institute of Chartered Accountants of India
and having a ‘Certificate of Practice’ issued by the said institute.
l. Date of commencement of operations (DOC) means date on which commercial
operations of the company has commenced as indicated in the UAM/ EM Part – II /Part B
of IEM in respect of Micro, Small & Medium Enterprises and Large Industries
respectively or DOC certified by charted accountant.
m. SC/ST enterprises are those IT/IES companies, having a stack of 100% shareholding by
SC/ST entrepreneurs, in the said IT/ITES unit.
n. Women enterprises are those IT/IES companies, having a stack of 100% shareholding by
women entrepreneurs, in the said IT/ITES unit.
o. MSME IT/ITES units are those units that have an annual turnover of less than Rs. 25 Crs.
p. SME IT/ITES units are those units that have an annual turnover of Rs. 25 Crs or More.
q. Mega Projects are the projects or the investment intends that can create employment of
5000 or more in the span of 5 years.
III. Claim for Incentives
a. The incentives can be claimed up to 31st March -2020.
IV. Allotment of Land
a. IT/ITES units with IT/ITES employee strength of 250 and annual turnover above Rs.25
cr. in previous financial year will be eligible to apply for land.
b. Subsidized land, whether by the way of concession or otherwise, by Government of
Andhra Pradesh or of its agencies is not eligible for rebate of land subsidy computation.
c. Extent of land allotment will be based on employment to be created over 6 years, where
for every 500 employees, 1 acre of land will be allotted and proportionately thereof.
Similarly per acre minimum built up area has to be 50,000 sq. ft.
d. Application for land allotment can be made to the APIIC once the project has been
approved by the CCITI.
e. Following timelines have to be adhered to in case of Government allotted land to avail
subsidy
i. start operations within 90 days
ii. start construction within 180 days
iii. employment fulfillment in 3 years - 30%
iv. employment fulfillment in 5 years - 70%
v. employment fulfillment in 6 years - 100%
f. All eligible IT enterprises shall submit their claims in the prescribed application form for
reimbursement of land cost after completion of one financial year from start of date of
commercial operations.
g. All eligible IT/ITES units will be reimbursed land cost as per quantum of subsidy
mentioned in policy from the DOC till policy is in force. The cost of land for computation
of incentives will be, lower of, actual cost paid or market value as per stamps and
registration department.
h. Employment subsidy on land will also be governed at para no. 5.V of this guideline.

i. The reimbursement of land cost shall be applicable to all IT/ITES units got land
recommended from CCITI, subject to fulfillment of the conditions stipulated at para no.
5.IV of this guideline.
V. Employment Incentive
a. All IT/ITES units shall submit their claims in the prescribed application form for
employment incentive after completion of one year from issue of G.O.Ms.No.21, date:
22.09.2016.
b. IT/ITES units that commenced operations after 22.09.2016 should complete minimum of
one year operations to claim incentives.
c. All eligible companies will be reimbursed employment incentive as per quantum of
subsidy mentioned in policy as per G.O.Ms.No.21, date: 22.09.2016.
d. Fiscal incentives for the employment generation after 22.09.2016 can be claimed with the
supporting list of employees who are on rolls of the IT/ITES unit (applicant) for more
than 12 months at the time of submission of such claims.
e. The incentive can only be claimed on the additional and permanent employment
generated where all statutory obligations such as provident fund, etc are met and does not
include:
i. Replacement of old positions
ii. Employment increase because of acquisition of other companies that availed
employment incentive.
iii. Employment through related parties (as per Indian Accounting Standard (Ind AS)
24 issued by ICAI)
iv. Contractual/outsourced employment
v. Internships
f. IT/ITES unit should meet the following condition to apply for employment incentive for
second time onwards;
i. By an increase in the number of employment by more than 10% over the
previously claimed employment or 10 additional employment, whichever is
higher.
g. The employment incentive to all eligible IT/ITES units will be approved by CCITI,
subject to fulfillment of the conditions stipulated at para no. 5.V of this guideline.
VI. Training Companies
Any autonomous institution promoted by Government/Public Sector Undertakings or
private sector with a substantive background of IT/ITeS industry or skilled manpower
development, that proposes to set up a training institution for skilling in new age IT
technologies shall file an application with the department, duly enclosing the detailed project
report, background note and financial discloser of the promoter/training company.
 Department will discuss the proposals received in detail in CCITI meeting and will
approve for subsidies subject to complying with the laid down criteria;
 a.All training companies, as per the policy, are eligible for investment subsidy of 50% or Rs.
1 crore, whichever is lower. Investment subsidy for this policy would mean investment
made on the items, as detailed in Annexure-1 of this guideline.
b.The eligible institute/industry/Enterprises shall submit their claims in the prescribed
application form along with the required documents mentioned in the application
c.Project cost will cover Fixed Capital Investment in equipment and machinery (including
installation cost), electrification, furniture and other miscellaneous investment required
for setting up training facilities, excluding land and building cost.
d. Training Centers which avail investment subsidy shall remain in continuous operations
for a minimum period of 3 years.
e.Training Companies that started commercial operations (DOC) after issuing amended IT
Policy (G.O.Ms.21 dated: 22-09-2016) are eligible for claiming investment subsidy.
f. Reports on training activities would be taken from the company for 3 years from DOC. In
case of failure, sanctioned incentives will be recovered from the company.
g. Company has to submit the half yearly reports on training activities and employment (if
any) in prescribed format given by the department.
h. Investment subsidy will be limited to Rs. 1 Cr across A.P.
i. Only training companies can claim incentives under this category. Companies with
IT/ITES business activity are not eligible to claim this investment subsidy. Conversely,
training companies are not eligible for applying employment incentive.
j. Investment subsidy for one company in one location/ premises can be claimed only once.
k. Training Companies want to claim for investment subsidy shall submit the following
documents;
i. Certificate of Incorporation
ii. MOA, AOA or Audited Statement Mentioning the current share holding
pattern and current directors of the company
iii. Supporting Invoices and payments/ receipts made for the items mentioned
in Annexure -1, duly certified by charted accountant.
iv. Business plan
VII. Applicability of IT policy
a.Andhra Pradesh Information Technology Policy 2014-20 in the state was notified vide
G.O.Ms.No. 13 dated 11.08.2014 herein after called ‘First Policy’.
b.Andhra Pradesh Information Technology Policy 2014-20 in the state was notified vide
G.O.Ms.No. 21 dated 22.09.2016 herein after called ‘Second Policy’.
c.IT/ITES units commenced operations on or after 22.09.2016 are mandated to choose
amended IT Policy by which they want to claim incentives under Second Policy.
d.IT/ITES units operating and claiming or eligible for incentives as per First Policy will have
one time option to avail either one of the policies (G.O.Ms. 13 or G.O.Ms.21) mentioned
above for claiming incentives.
e.IT/ITES units which were in eligible for incentives as per First Policy, would now become
eligible to claim incentives only as per Second Policy, based on the new employment
generated after 22.09.2016.
f. For scenario as mentioned in para 5.VII.d, IT/ITES units to avail incentives under new
policy will have to present their case in front of CCITI in the prescribed format. CCITI
after careful examination may permit for migration to new policy.
VIII. Furnishing of Statement of account/information by eligible Enterprises
 IT/ITES units, which obtain incentives under the scheme, shall furnish certified copy
of audited accounts including Balance Sheet before 30th June of the succeeding year to the
department. Such statement should be furnished for a period of three (3) years. Further,
IT/ITES units should also furnish details of sales, employment, export etc., in the proforma
prescribed to the department concerned as an Annual Return before 30th June of the
succeeding year and obtain acknowledgment thereof. However, IT/ITES units which are
released employment subsidy not exceeding Rs.1, 00,000/- may furnish only the Annual
Performance Report in the proforma prescribed to the department concerned as an Annual
Return before 30th June of the succeeding year and obtain acknowledgment thereof for a
period of Six (6) years may be after going into commercial operations. In case if any
entrepreneur fail to submit the certified audited accounts including Balance Sheet or Annual
Performance Report in time, the recurring incentives in future will be stopped.
IX. Interpretations
 When any matter arises for the purpose of interpretation on which CCITI could not
take a decision or in case where any suggestions are made outside the scope of CCITI in
regard to implementation of the policy, such matters shall be referred to the Government in
Information Technology, Electronics & Communication Department, Government of Andhra
Pradesh for decision.
X. Penalties
 Without prejudice to anything included in para VII, it is hereby ordained that any
willful misrepresentation of facts, action/inaction on behalf of an entrepreneur leading to
irregular sanction/disbursement of incentives under the above policies will invite civil and
criminal action as per extant laws besides recovery of the amount irregularly disbursed, if
any, and debarring of the unit from claiming incentives in the future.
6. Process , release and monitoring of incentives are, if need be, subject to verification of
authenticity of information furnished on turnover, investment, employment from the statutory
agencies, such as, APEITA, STPI, SEZ Commissioner, NASSCOM or any other
appropriate/concerned statutory agency etc.
7. In case it is found at any point of time that any particular incentive is claimed by any
IT/ITES units through misrepresentation of facts/furnishing of false information and in case it is
found that the respective company is not eligible for the incentive so sanctioned or claimed,
Government can seek the refund of the same from the company and initiate, any other penal
action as is deemed fit.
8. The interpretation and decisions of the Government is final with regard to applications
made by the IT/ITES units for any of the incentives available as per AP IT Policy 2014-
2020.Government shall not entertain any correspondence against its decision nor can the matter
be subjected for any challenge in any court of law at any point of time.
9. Recoveries of Incentives Sanctioned under the Policy
 Incentives/concessions granted to IT/ITES units shall be liable to be recovered under the
following circumstances.
a. If the incentives/concessions are obtained by the IT/ITES units by misrepresentation of
essential facts or by furnishing of false information or suppressions of material/
immaterial facts or by submission of false/fake documents etc. In addition to recovery of
the incentives granted, penalty will be levied @ 2 times of the sanctioned and disbursed
amount and barred from availing incentives in future.
b. If the IT/ITES units fails to furnish the prescribed statements and/ or information when it
is called upon to furnish.
c. If the IT/ITES units effects change of management without prior approval from the
financing institution concerned and the CCITI.
d. If the whole or part of the company is sold without the prior approval of the financial
institutions/CCITI.
e. If the IT/ITES unit enters into a contract of any nature whatsoever by transferring the
Management, without the prior approval of the financial institutions/CCITI.
f. In the event of recoveries for reasons arising mentioned above, they shall be recovered
treating them as arrears of Land Revenue under A.P. Revenue Recovery Act, 1864 and
ITPOs will be designated as recovery officers by suitable Government Orders.
10. IT/ITES units shall visit http://itecinvest.ap.gov.in to apply for incentives for their
eligibility criteria.
11. The operational guidelines issued for administration of Incentives available under AP IT
Policy 2014-2020 to the eligible IT/ITES units as mentioned above shall be in force and coterminus
with the validity period of the AP IT Policy 2014-2020.
(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)
K.VIJAYANAND
 PRINCIPAL SECRETARY TO GOVERNMENT

ANNEXURE-1
Investment Subsidy for Training Companies
Companies shall furnish the support documents (invoices/receipts) for the following
items while applying for investment subsidy;
Note: Any item not covered above shall be discussed and sanctioned by CCITI.
K.VIJAYANAND
 PRINCIPAL SECRETARY TO GOVERNMENT
S.No Item Description
1 Servers with OS
2 Software/Software tools and Hardware per license cost for training activities
3 Networking Equipments (Switches, Routers, Firewalls, Voice/Video
Conferencing Gateways for e-learning, Audio & Video Equipment etc)
4 Workstations (Desktop, Laptop, Tablets, Headsets)
5 License cost for data storage in Cloud for training activities
6 Power backup (UPS)
7 Printer, Copier, Scanner & Projector
8 Fire & Security Items (CC TV Cameras / Monitoring Systems)
9 Workstation Furniture (Tables, Chairs, Sofa Sets etc) & Interior designs by
Interior Decorators/self
10 Electrical wiring & fittings
11 Bio-Metric Devices
12 Central Air-conditioning equipment, air-conditioning System
13
Captive Diesel Generating Set and transformer of capacity commensurate with
the actual requirement of the unit, solar power/ Non conventional Energy
Generation Set
14 Other misc. goods not exceeding 5 % of the total cost of above items