Chapter D-4 Sick Unit Revival: 100% Stamp Duty Waiver & Subsidies for SARFAESI / NCLT Factory Buyers in Chhattisgarh

Acquiring stressed industrial assets, non-performing asset (NPA) factories, or closed manufacturing units via SARFAESI Bank Auctions, NCLT insolvency proceedings, or Asset Reconstruction Company (ARC) sales presents a major investment opportunity in Chhattisgarh.

To encourage the rehabilitation of non-functional industrial assets, the Chhattisgarh Industrial Development Policy 2024–30 (Updated May 27, 2025) introduces a dedicated Special Incentive Package for Closed and Sick Enterprises under Chapter D-4.

In this guide, CA Rabi Agrawal & Associates outlines how buyers of distressed factories can claim 100% Stamp Duty Waiver, 'New Unit' Status Recognition, 36-Month Past Dues Restructuring, and Transfer of Unavailed Subsidies.

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1. Statutory Definition of Closed & Sick Units (Annexure-1, Point 38)

Under the policy, an enterprise qualifies as a Closed or Sick Industrial Unit under specific statutory conditions:

A. Closed Enterprise (Point 38a)

• Was commercially operational for at least 2 years prior to closure, AND
• Has been closed for at least 18 consecutive months (resulting in electricity disconnection or nil GST filings), or declared closed by the State-Level Rehabilitation Committee.

B. Sick Enterprise (Point 38b)

• Micro & Small Enterprises: Bank loan account has remained an NPA for over 2 years, OR accumulated cash losses have reduced net worth by 50% in the previous fiscal year.
• Medium & Large Enterprises: Loan account has remained an NPA for 6 months or more, or continuous losses have reduced net worth by 50%.

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2. Key Incentives under Chapter D-4 Revival Package

When an investor, partnership firm, or company purchases a declared closed or sick factory via SARFAESI auction, NCLT, or ARC, Chapter D-4 grants the following concessions:

A. 100% Stamp Duty & Registration Fee Waiver (Clause 1.1)

• 100% exemption from Stamp Duty on the sale deed executed for purchasing the closed/sick industry assets.
• 100% exemption from Registration Fees on land and building transfer.
• 5% Concessional Land Transfer Fee: In industrial areas/land banks managed by CSIDC, land transfer fees are capped at 5% of the land premium.

B. "New Unit" Classification for Fresh Subsidies (Clause 12.27b)

If the acquired enterprise initiated establishment but did not commence commercial production prior to auction:

• The new buyer is legally recognized as a 'New Unit'.
• The new buyer becomes eligible for fresh Fixed Capital Investment (FCI) Subsidies, 55% Interest Subsidies, and Electricity Duty Waivers based on the purchase consideration specified in the bank auction sale deed.

C. 36 Monthly Installment Settlement of Outstanding Dues (Clause 2)

• To resolve accumulated electricity, water, and statutory municipal dues of the previous owner, the new buyer can clear the principal amount + surcharges in 36 equal monthly installments (or 12 quarterly installments).

D. Full Transfer of Unavailed State Subsidies (Clause 1.2)

• Any state subsidies (such as unavailed interest subvention years or capital investment grants) that were partially used or unused by the original closed unit are fully transferred to the new acquiring owner.

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3. Mandatory Buyer Eligibility Conditions

To claim Chapter D-4 revival incentives, the acquiring buyer must satisfy two mandatory criteria:

1. Minimum Capital Investment: The purchaser must make an additional capital investment of at least ₹100 Lakhs in plant and machinery installed on the factory premises.
2. One-Time Benefit Limitation: The rehabilitation package for resuming a closed unit can be granted only once to any specific industrial property.

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4. CA Advisory & Revival Rehabilitation Workflow

┌───────────────────────────┐      ┌───────────────────────────┐      ┌───────────────────────────┐
│ 1. SARFAESI / NCLT Sale   │ ───► │ 2. CA Valuation & DPR     │ ───► │ 3. 100% Stamp Duty Waiver │
│ Execution of Auction Sale │      │ Financial Rehabilitation  │      │ CA Certification for Reg  │
└───────────────────────────┘      └───────────────────────────┘      └───────────────────────────┘
                                                                                    │
                                                                                    ▼
┌───────────────────────────┐      ┌───────────────────────────┐      ┌───────────────────────────┐
│ 6. Disbursal & Subsidies  │ ◄─── │ 5. CPC & "New Unit" Cert  │ ◄─── │ 4. Past Dues Settlement   │
│ Transfer of Unused Grants │      │ Joint DTIC Verification   │      │ 36 Monthly Installments   │
└───────────────────────────┘      └───────────────────────────┘      └───────────────────────────┘

1. Asset Valuation & Debt Due Diligence: Reviewing bank auction sale terms, past electricity/GST liabilities, and remaining policy eligibility.
2. Rehabilitation DPR Preparation: Preparing a Detailed Project Report (DPR) showing mandatory ₹100 Lakhs fresh machinery investment.
3. CA Certification for Stamp Duty Waiver: Issuing CA Verification Certificates presented to the Sub-Registrar for 100% Stamp Duty Exemption.
4. DTIC Single Window Registration: Submitting the revival file to the Directorate of Industries for "New Unit" status and subsidy transfer.

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Statutory Legal & Policy Disclaimer

Disclaimer: Rabi Agrawal & Associates is a chartered accountancy practice registered with the Institute of Chartered Accountants of India (ICAI). This article is published for educational guidance based on Chapter D-4 of the Chhattisgarh Industrial Development Policy 2024–30 (Notification dated 27.05.2025). The availability of SARFAESI/NCLT stamp duty exemptions, dues restructuring, and subsidy transfers is subject to statutory verification, legal title clearances, and formal approval by the Department of Commerce & Industries, Govt of Chhattisgarh, State-Level Rehabilitation Committee, and lending banks. Our firm provides independent financial advisory, audit certification, and procedural guidance under ICAI guidelines, and does not guarantee government approval or act as a government agent.