VATIS UPDATE Article

Bio-technology firms in India are likely to soon get a relaxation of an additional 3-years in the eligibility criteria for being recognised as start-ups. The Department of Bio-technology (DBT) has sent a formal proposal to the Department of Industrial Policy and Promotion (DIPP) stating that the requirement of registration of entities not prior to 5-years should be extended to 8-years for bio-tech firms as their gestation period is more than other sectors.

The change in the duration criteria for bio-tech start-ups is likely to be a part of the overall changes in the definition of start-ups that the DIPP is planning to bring about. The DIPP will also not bring about any changes in the eligibility criteria for tax incentives. At present eligible start-ups can make use of their 3-year tax holiday in a block of 7-years. Apart from tax sops, start-ups, meeting the 5-year duration criteria, are eligible for several other incentives.

Start-ups falling under the list of 36 “white” category industries get exemption from a number of environmental laws and labour law relaxations. To give a leg up to start-ups, public procurement norms for micro and small enterprises have been eased. The Department of Expenditure has also notified that all Central Ministries/Departments may relax condition of prior experience and prior turnover in public procurement to all start-ups subject to their meeting quality and technical specifications.