Circular No. ES/153/2020-21 23rd May, 2020
To : Members of the Council
Sub: Operational guidelines for release of subsidy against Bank Guarantee under RRTUFS
Kindly refer to Council’s Circular No. ES/135/2020-21 dated 14th May, 2020 regarding operation guidelines for release of subsidy against Bank Guarantee under ATUFS issued by the Office of the Textile Commissioner.
Now, the Office of the Textile Commissioner has issued Circular No.5(1)(2)/RRTUFS POLICY/2020/02 dated 22nd May, 2020 on the operational guidelines for release of subsidy against Bank Guarantee under RRTUFS.
We would like to inform you that the Ministry of Textiles vide letter No.16021/5/2019-TUFS (pt) dated 13th April, 2020 has enclosed OM No.16015/01/2019-TUFS dated 13th April, 2020 conveying the approval of the Ministry of Textiles for inserting the following sub Para 2.3.5(a) under Para 2.3.5 of the Ministry approved Protocol of even no dated 14.06.2019 regarding physical inspection of machinery procured under previous versions of TUFs including RRTUFs:
"The subsidy accounts extending beyond 31 March, 2021, for which claims have been filed by the banks along with necessary documents/information and where JIT has recommended the committed liability (IR or/and CIS), the subsidy amount till 31st December 2019 recommended by JIT will be released subject to the submission of Bank Guarantee equivalent to JIT recommended subsidy amount by the concerned account holder unit through bank/lending agency. The Bank Guarantee should be valid for one year (to be submitted within a month of its issue by the bank) and extendable further, if required. In case the eligible subsidy amount approved for release after scrutiny of JIT report by respective authority works out to be lower than the amount recommended by the JIT, the excess payment made, if any, along with penal interest as applicable under rules, will be adjusted from the eligible payment being released for the subsequent quarters beyond 31st December 2019 or recovered by forfeiting the Bank Guarantee to the extent of excess payment made along with applicable penal interest”.
In pursuance of the above order, Textile Commissioner vide Circular No.12 (1)/ATUFS/Policy/2019/Del. of Fin Prs dated 17th April 2020 opened the window in iTUFS till 25th April 2020 for eligible units to submit their willingness to get appropriate subsidy against Bank Guarantee. The units who have submitted their option in iTUFS portal/ through email for release of subsidy against Bank Guarantee are required to submit BG equivalent to the subsidy amount recommended in JIT report i.e., within six months from the date of issue of the Ministry of Textiles' Order No.6/5/215-TUFS dated 13th April 2020.
In order to release subsidy against BG under RRTUFS, the detailed procedure is as under:-
(i) The eligible units (in line with the sub para 2.3.5(a) of the protocol dated 14.6.2019 as amended above) who have exercised the option for release of the JIT recommended subsidy upto the quarter Dec 2019 are required to submit a Bank Guarantee (BG) equivalent to 70% of the amount of subsidy recommended by JIT. BG should be issued by the same bank and branch from which the Term Loan has been sanctioned. In case of consortium finance, BG in prescribed format to be issued by any one of the multiple lending agencies which have sanctioned loan for the project along with No Objection letter from the remaining lenders. Considering the possibility of certain percentage of rejection or reduction in subsidy claims recommended under RRTUFS post JIT and overall availability of funds under the Scheme, 60% of the JIT recommended subsidy will be released to the lending agencies concerned for onward transmission to the concerned Unit. Upon verification and final settlement of the claim, necessary adjustments will be carried out in terms of the provisions of Para 3(x) & 3(xi) of this Circular.
(ii) The BG should be issued in favour of The Textile Commissioner, Mumbai valid for 12 months (to be submitted within a month of its issue by the bank) and extendable further, if required. The BG will be issued by the issuing Bank on an AUTO RENEWAL Basis in the format to be prescribed by the O/o Textile Commissioner. Original BG should deposited with the ROTXC where inspection has been done (RO will acknowledge the receipt in prescribed format to UNIT and RRTUF cell in email) and will also verify the BG with the issuing bank before uploading the authenticated copy of this BG on the iTUFS software where a link will be provided.
(iii) The RO will be safe custodian of all original BGs (irrespective of the authority as per the delegation of financial power) submitted physically by the units to them. RO to undertake monthly review of bank guarantee expiring after 3 months for ensuring its timely extension as per the provisions of guidelines under Rule 226(ii) of GFR. The Textile Commissioner will monitor receipt, safe custody, review and release of bank guarantees on regular basis through iTUFS software and by periodically deputing teams to field offices to ensure that the provisions of GFR has been strictly complied with. ROs situated in containment Zones/ Municipal Corporation/Cities declared as 'Red Zones’ as per the instructions of Central/State Government in view of COVID-19 outbreak, specified dates(s) for submission of BG by the units to such ROs will be notified separately.
(iv) Based on the Spl. JIT report, attested copy of BG uploaded online by ROTXC and submission of pre-receipt payments/documents in PFMS, approval for release of subsidy as at 3(i) above will be accorded by the Competent Authority, as per the delegation of powers, subject to fulfillment of other terms and conditions as applicable to such cases.
(v)In case the units want to withdraw the option exercised even after submission of BG but prior to approval for release of subsidy by the competent authority, such units will have to apply to ROTXC so as to consider and return of the BG to the units.
(vi) FIFO for release of such claims will be the date of physical inspection by JIT and date of uploading of attested copy of the BG by the RO.
(vii)Challans for such claims will be created based on approval accorded by the Competent Authority.
(viii) Post release of subsidy against BG, the claim (i.e. Spl. JIT's report) will be processed on FIFO as per the date of physical inspection by JIT.
(ix)If the amount of eligible subsidy is found to be higher than subsidy released against BG during regular scrutiny by Competent Authority, the difference will be released to the loan account of unit's term loan account.
(x)In the scenario of eligible subsidy being lower, the Lending Agencies may explore the option of refund of the amount to the extent of excess payment and penal interest @ 10% p.a. (computed as simple interest on excess amount released from the day of release of subsidy) within a fortnight of communication of refund order, otherwise the authority will forfeit the BG. If the BG does not cover the excess amount (including penal interest), further recovery will be made from the unit in addition to forfeiting the entire BG.
(xi)If unit/bank is unable to refund the requisite amount within 3 months from date of issue of refund order, the entity will be blacklisted from availing benefits from Schemes of Ministry of Textiles, Government of India and further appropriate actions for recovery will be initiated as per rules.
This issues with the approval of Ministry of Textiles vide their letter No 16021/5/2019- TUFS dated 21.05.2020
Members may please make a note of the above.