Industrial Entrepreneur Memorandum (IEM)
Comprehensive guide to filing IEM Part A & Part B for industrial undertakings in India
Why File IEM?
- Statutory requirement for manufacturing sector
- Facilitates government approvals and incentives
- Essential for bank loans and financial assistance
- Helps in tracking industrial growth and development
Understanding IEM
What is IEM?
The Industrial Entrepreneur Memorandum (IEM) is a declaration filed by an entrepreneur with the Ministry of Commerce and Industry, Government of India, for establishing a new industrial undertaking or substantial expansion of an existing industrial undertaking.
IEM filing is mandatory for manufacturing industries with investment in plant and machinery exceeding specified limits, as per the current industrial policy.
Two-Part Process
A
IEM Part A
Filed at the time of intent to establish a new industrial undertaking or substantial expansion
B
IEM Part B
Filed after commencement of commercial production to report the actual investment and employment details
Applicability
Applicable to all industrial undertakings in the manufacturing sector with investment in plant and machinery exceeding ₹10 crores, not requiring an industrial license.
Timeline
Part A should be filed before commencement of construction or installation of plant and machinery. Part B must be filed within 2 years of commencement of commercial production.
Benefits
Facilitates access to government incentives, subsidies, and schemes. Serves as a valid document for obtaining various approvals and financial assistance.
A
IEM Part A
Purpose & Requirements
Purpose
- Declaration of intent to establish a new industrial undertaking
- Notification of substantial expansion of an existing undertaking
- Provides projected investment and employment details
- Helps in obtaining necessary clearances and approvals
When to File
- Before commencement of construction or installation of plant and machinery
- At the planning stage of the industrial project
- Prior to seeking financial assistance from banks/financial institutions
- Before applying for various government incentives and subsidies
IEM Part A - Information Required
The following information must be provided when filing IEM Part A:
1. Basic Information
- Name of the undertaking/company
- Registered office address with contact details
- PAN/TAN/CIN details of the company
- Nature of activity (new unit/substantial expansion)
- Type of organization (Proprietorship/Partnership/LLP/Company)
2. Location Details
- Complete address of the industrial unit
- District, state, and pin code
- Whether located in backward/special category area
- Land details (area, ownership status, industrial zone)
- Proximity to raw material sources and markets
3. Product Details
- Description of items to be manufactured
- Annual installed capacity (quantity and value)
- NIC code of the products
- End use of the products
- Whether products require industrial license
4. Investment Details
- Proposed investment in land and building
- Proposed investment in plant and machinery
- Source of funding (equity, debt, foreign investment)
- Foreign equity participation, if any (percentage)
- Total project cost and means of financing
5. Employment & Implementation
- Projected direct employment generation
- Skilled/unskilled labor requirements
- Expected date of commencement of production
- Project implementation schedule
- Phasing of implementation, if any
6. Technical Details
- Manufacturing process to be adopted
- Technology source (indigenous/imported)
- Power and water requirements
- Raw material requirements and sources
- Pollution control measures to be adopted
Required Documents for IEM Part A
- Certificate of Incorporation/Registration
- Memorandum and Articles of Association
- PAN Card of the company
- GST Registration Certificate
- Board Resolution for the proposed project
- Project report with financial projections
- Land documents (sale deed/lease deed)
- Digital Signature Certificate (DSC) of authorized signatory
B
IEM Part B
Purpose & Requirements
Purpose
- Confirmation of commencement of commercial production
- Reporting of actual investment made and employment generated
- Updating the government database on industrial production
- Compliance with industrial policy requirements
When to File
- Within 2 years of commencement of commercial production
- After the industrial unit has started manufacturing activities
- When the project implementation is complete or substantially complete
- Before applying for any post-production government incentives
IEM Part B - Information Required
The following information must be provided when filing IEM Part B:
1. Reference Details
- IEM Part A acknowledgment number and date
- Name of the undertaking/company
- Registered office address with contact details
- Factory address with contact details
- Date of commencement of commercial production
2. Actual Production Details
- Items being manufactured (with NIC codes)
- Actual installed capacity (quantity and value)
- Current production levels
- Any changes in product mix from IEM Part A
- Export orientation, if any
3. Actual Investment Details
- Actual investment in land and building
- Actual investment in plant and machinery
- Actual sources of funding (equity, debt, foreign investment)
- Actual foreign equity participation, if any (percentage)
- Total actual project cost
4. Employment Details
- Actual direct employment generated
- Breakdown of skilled/unskilled labor
- Managerial and supervisory staff
- Contract workers, if any
- Comparison with projected employment in Part A
5. Technical Implementation
- Actual manufacturing process implemented
- Technology source (indigenous/imported) details
- Actual power and water consumption
- Pollution control measures implemented
- Quality control measures adopted
6. Compliance & Approvals
- Factory license details
- Pollution control board approvals
- Power connection details
- Other statutory approvals obtained
- Status of any pending approvals
Required Documents for IEM Part B
- Copy of IEM Part A acknowledgment
- First commercial invoice/bill
- Factory license
- GST registration certificate
- Pollution control board consent to operate
- Power connection approval/agreement
- Chartered Accountant certificate for investment details
- Digital Signature Certificate (DSC) of authorized signatory
IEM Filing Process
Online Filing Procedure
- Registration on DPIIT Portal: Register on the Department for Promotion of Industry and Internal Trade (DPIIT) portal with valid credentials.
- Login & Select Form: Login to the portal and select the appropriate IEM form (Part A or Part B).
- Fill Required Information: Complete all mandatory fields with accurate information as per the requirements.
- Upload Documents: Attach all required supporting documents in the specified format.
- Digital Signature: Sign the form using a valid Digital Signature Certificate (DSC).
- Submit & Download: Submit the form and download the acknowledgment for future reference.
Important Points to Remember
- Ensure all information provided is accurate and matches with supporting documents.
- Keep the IEM Part A acknowledgment number handy when filing IEM Part B.
- File IEM Part B within 2 years of commencement of commercial production to avoid penalties.
- Any significant deviation from the details provided in IEM Part A should be properly explained in IEM Part B.
- Ensure all statutory approvals and licenses are in place before filing IEM Part B.
Common Challenges & Solutions
Delay in Project Implementation
Changes in Product Mix
Increase in Investment
Change in Location
Technical Issues in Online Filing
Frequently Asked Questions
Is IEM filing mandatory for all industrial undertakings?
What is considered as 'substantial expansion' for IEM filing?
What happens if IEM Part B is not filed within the stipulated time?
Can IEM Part A be amended after filing?
Is Digital Signature Certificate (DSC) mandatory for IEM filing?
What are the benefits of filing IEM?
Need Assistance with IEM Filing?
Our expert consultants can guide you through the entire process of IEM Part A and Part B filing, ensuring compliance and maximizing benefits.