Net SGST Reimbursement

• DPIIT-recognised Haryana startups seeking SGST reimbursement on taxable turnover.

About this scheme

This program offers a crucial reimbursement for Net State Goods and Services Tax (SGST) paid by eligible startups operating in Haryana. As a key fiscal benefit under the comprehensive Haryana Startup Policy 2022, it is strategically designed to foster and support the growth of emerging businesses within the state. The initiative is collaboratively overseen by the Department of Industries & Commerce, Government of Haryana, and Startup Haryana. Startup Haryana, the state's dedicated nodal agency, cultivates a dynamic ecosystem for new ventures, delivering incentives and support mechanisms specifically tailored for local innovators and entrepreneurs.

The core benefit entails a reimbursement of 50% of the Net SGST paid by a qualifying startup. This financial support is accessible for a substantial duration of seven years, from the date the startup formally commences its commercial operations. The funding mechanism is structured purely as a reimbursement model: startups first pay the applicable tax and subsequently claim back the eligible portion. This design is specifically intended to bolster working capital and significantly enhance early-stage cash flow, aiding the financial stability and accelerating the growth trajectory of developing businesses.

This reimbursement directly tackles the operational tax burden, leading to a tangible reduction in overall operational costs for startups. By alleviating a portion of the indirect tax liability, the program empowers startups to retain more capital. This retained capital can then be strategically reinvested into core business activities, crucial product development, market expansion initiatives, or talent acquisition. The primary focus of this scheme is purely on direct financial relief through tax benefits, providing a clear financial advantage to eligible enterprises.

Who can apply

• **DPIIT Recognition**: Startups must hold a valid recognition certificate from the Department for Promotion of Industry and Internal Trade (DPIIT). This ensures the applicant meets the national definition of a startup, verifying innovation and scalability potential, a prerequisite for most government startup benefits in India.
• **Haryana Registration and Commercial Operation**: The startup must be officially registered and actively conducting commercial operations exclusively within Haryana. This ensures the benefit directly supports local economic development and job creation within the state.
• **Active SGST Payment**: Applicants must demonstrate active payment of State Goods and Services Tax (SGST) on their taxable supplies originating from Haryana. This confirms the startup's engagement in regular commercial activities that generate tax liabilities eligible for reimbursement.
• **Mandatory GST Registration**: Possession of a valid Goods and Services Tax (GST) registration in Haryana is mandatory, verifying the startup's legal standing for tax purposes.
• **Net SGST Calculation**: The reimbursement claim is precisely calculated based on 'Net SGST,' defined as total SGST deposited minus any eligible input tax credit utilized. This ensures only the actual tax burden borne by the startup is considered.
• **Financial Compliance**: Startups are required to maintain comprehensive, audited financial statements and ensure timely submission of all regular GST returns. This robust compliance is crucial for transparency, accountability, and verification of claims by the government.

Eligible entity types: Private Limited, LLP, Partnership

Benefits & funding

• Reimbursement of 50% Net SGST for eligible Haryana startups over seven years.
• This financial support boosts working capital, enhances early-stage cash flow, reduces operational tax burden and overall costs, allowing capital reinvestment into business activities, product development, market expansion, or talent acquisition.

How the application process works

The journey below is informational, compiled from the official program guidelines. Applications are submitted directly with Department of Industries & Commerce, Government of Haryana, in your own name.

1. 1

   Applications are submitted through the Invest Haryana portal with a DPIIT certificate, GSTIN, and net GST payment records.

2. 2

   The Department of Industries & Commerce verifies submissions before processing reimbursement.

3. 3

   Eligible DPIIT-recognised Haryana startups receive net SGST reimbursement on an annual basis under the Haryana Startup Policy 2022.

Documents checklist 4

• GST Returns (GSTR-3B, GSTR-9)
• CA-certified Net SGST Computation
• DPIIT Certificate
• Bank Details

Need help getting these in order? IncorpX provides assistance for incorporation, DPIIT recognition, MSME and GST registrations along with document preparation.

Frequently asked questions