- April 1, 2025
- Posted by: Amit Mundhra CA
- Category: Rajasthan Investment Promotion Scheme
If you run a Micro, Small, or Medium Enterprise (MSME) in Rajasthan, the Benefits for MSME under RIPS 2024 provide numerous opportunities to boost your business. Whether you’re starting a new venture or expanding, RIPS 2024 offers valuable incentives to support your growth.
What is the Definition of MSME under RIPS 2024?
Definition of MSME: The term Micro, Small, and Medium Enterprises (MSMEs) refers to businesses that fall into different categories based on their investment in plant and machinery or equipment, and their annual turnover. As per the Government of India’s definition, the MSMEs are categorized into three types:
- Micro Enterprises: These are businesses where the investment in plant and machinery or equipment is not more than ₹1 crore and the annual turnover is not more than ₹5 crores.
- Small Enterprises: These are businesses where the investment in plant and machinery or equipment is not more than ₹10 crores and the annual turnover is not more than ₹50 crores.
- Medium Enterprises: These businesses have investment in plant and machinery or equipment not more than ₹50 crores and their annual turnover is not more than ₹250 crores.
Recently the Government of India has changed the definition of MSME in Budget 2025. However the Government of Rajasthan has not yet updated the definition of MSME in RIPS 2024.
What are the Eligibility Criteria of Benefits for MSME under RIPS 2024?
All the MSME enterprises who setting up a new business undertaking or unit are eligible to apply for benefits under this scheme except those who are into the ineligible businesses.
Are New MSME Enterprises eligible to apply for benefits under RIPS 2024?
A new enterprise refers to a business that is being set up or established for the first time in Rajasthan. Please note that the new enterprise is based on the location of the enterprise. If an existing entity is setting up a new manufacturing plant at a different location, the investment in said plant will qualify as New Enterprise under the RIPS 2024.
In addition to this the enterprise must commence commercial production or operations during the operative period of the policy (which is until March 2029).
Is MSME Enterprises doing an Expansion in capacity eligible for applying for benefits in RIPS 2024?
There is a major change in the conditions regarding eligibility of existing enterprises in applying for benefits under RIPS 2024. The benefits under the Expansion of an Enterprise will only be available to Large Enterprises. MSMEs are not eligible to apply for the benefits in the case of Expansion. This is a drastic change in the fundamentals of the scheme as compared to earlier investment promotion schemes of Rajasthan state.
Definition of Expansion (only for Large Enterprises) : In case of Expansion of enterprise both the below eligibility conditions needs to be satisfied for becoming eligible for applying for benefit under RIPS 2024.
- Minimum expansion investment of Rs. 50 Crore for manufacturing enterprises and Rs. 25 Crore for Service Enterprises and
- Minimum expansion investment of at least 25% of its existing investment and expansion should generate incremental capacity of at least 20%.
What are the Eligible Service Sector Enterprises under RIPS 2024?
In respect of the service sector, the enterprises doing business in below service sectors are eligible to apply for benefits under RIPS 2024. The definition of each service sector has been given in the scheme document. Only service sectors satisfying the criteria given in the definition will be covered under the RIPS 2024.
- IT and ITES
- Tourism
- Fintech
- Entertainment
- Film City
- Common Utility Centre
- Plug and Play Office Complex
- Social Infrastructure
- Health Care
- Civil Aviation
- Sports Academy
- AVGC-XR (Animation and Media-related activities)
- Higher Education
- Vocational Training and Skilling
- Knowledge-Based Industries
Can an MSME with an Investment exceeding Rs. 25 Crores apply for benefits under RIPS 2024?
MSMEs with an Eligible Fixed Capital Investment exceeding Rs. 25 Crores may choose to apply for benefits under either.
- Under MSME Category
- Under Large Enterprises Manufacturing Category
- Under Large Enterprises Service Category
What is the Maximum Limit of Benefits available to MSMEs under RIPS 2024?
Please note that the total incentives for MSMEs availing benefits under this scheme is limited to Rs. 5 Crores per annum.
Which Businesses Are Not Eligible for RIPS 2024?
Below businesses are not eligible to claim benefits under RIPS 2024.
- Investment for manufacturing of tobacco, tobacco products and pan masala
- Investment made in cow beef processing units
- Investment made in retail / trading activities
- City Gas Distribution System
- Any other activity which is prohibited by State or Central Government.
What Incentives are available to MSME Enterprises under RIPS 2024?
An MSME can apply for the following incentives under RIPS 2024.
SGST Refund: You can get 75% reimbursement on the SGST deposited by your business via Cash Ledger (after taking GST Input) for the next 10 years. This means that if your business has most of the sales within Rajasthan, then you have a good chance at becoming eligible to claim this benefit.
Interest Subsidy: If you are taking loan to set up your business, you can claim the following interest subsidy under RIPS 2024.
- 6% Interest Subsidy for loans up to ₹5 crores.
- 4% Interest Subsidy for loans between ₹5 crores and ₹10 crores.
- 3% Interest Subsidy for loans above ₹10 crores.
This means that a significant portion of the interest on your loans will be paid by the government, making your business finances much easier to handle.
PF and ESI Refund: If you are registered under PF and ESI, you can get 50% refund for your contribution to their EPF (Employees’ Provident Fund) and ESI (Employees’ State Insurance) for 7 years. This is a great way to grow your workforce without worrying too much about cost
Fundraising Subsidy: If you’re raising capital to expand your business, you can get 50% of the cost involved in raising funds (up to ₹5 lakhs). This can be a huge help when looking for funds to take your business to the next level.
What are the various Exemptions available to MSMEs under RIPS 2024?
RIPS 2024 also offers some helpful exemptions to reduce your operational costs:
- Electricity Duty Exemption: You’ll get 100% exemption from electricity duty for 7 years, which can save you a lot of money, especially if your business uses a lot of power.
- Mandi Fees Exemption: If your business is involved in agricultural trading, you’ll get 100% reimbursement on mandi or market fees for 7 years.
- Stamp Duty Exemption: When you purchase or lease land, you’ll get 75% exemption on stamp duty and 25% reimbursement on it. This is a great incentive available for the enterprises which are planning to purchase or lease out the land for setting up their business in Rajasthan.
- Conversion Charges Exemption: Similarly, you’ll get 75% exemption and 25% reimbursement on conversion charges.
To Sum Up
RIPS 2024 is a powerful tool to help MSMEs in Rajasthan grow, compete, and succeed. The scheme offers financial support, exemptions, and incentives to make your journey easier. So, if you are running an MSME in Rajasthan, it’s time to take advantage of these benefits and watch your business reach new heights!
