Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →
PLI Auto scheme operates a ₹26,058 crore outlay over FY 2023-24 to FY 2027-28 with claim disbursement requiring incremental-sales calculation over FY 2019-20 base year, DVA certification at 50%+ thresholds, eligible-product certification, committed-investment milestone tracking, PMA quarterly filing, sanction-to-bank-credit lag of 30-90 days, and post-sanction reconciliation against actual bank receipt — with GST exemption posture and Income Tax taxability creating dual accounting treatment.
Reconcile claim per quarter against base-year frozen ledger (FY 2019-20 actuals by eligible product), tie eligible-sales calculation to DVA-certified production, file with PMA on quarterly cadence, age sanction letter against bank-credit arrival, queue PMA disallowance lines for appeal in next cycle, book bank credit to correct GAAP ledger with GST exempt and Income Tax taxable treatment, monitor committed-investment milestones against eligibility maintenance.
PLI eligible-product master with FY 2019-20 base sales frozen, DVA calculation worksheet with imported-content tracking, committed-investment milestone register, PMA filing cadence calendar, claim status workflow (drafted, filed, under-review, sanctioned, credited, appealed), bank-credit matching configuration against sanction letter reference, GAAP-treatment flag per receipt.
A quarterly PLI claim dashboard showing eligible incremental sales per product, DVA percentage achieved, claim band, filed claim amount, sanction letter status, bank-credit receipt date and amount, any disallowance amount queued for appeal, cumulative scheme-tenure incentive realised against ₹26,058 crore outlay share, and committed-investment milestone status.
A Tier 1 supplier in Aurangabad with ₹1,800 crore committed PLI Auto investment closes Q2 FY 2026-27 and pulls the PLI ledger: ₹400 crore eligible incremental sales over the FY 2019-20 base year on AAT-certified EV traction motor and inverter products, 58% DVA achieved against the 50% threshold, and a ₹60 crore claim filed with IFCI as PMA. Q1 FY 2026-27’s claim — ₹52 crore — was sanctioned at ₹48 crore with ₹4 crore disallowed on a DVA dispute, and the bank credit arrived 84 days after sanction. The PLI Auto claim reconciliation India workflow has to track all of this across four overlapping cycles — current-quarter filing, prior-quarter sanction, prior-quarter receipt, and any open appeal — for each of the next 20 quarters of the scheme.
Quick reference
| Item | Value |
|---|---|
| Scheme name | PLI Auto (Production Linked Incentive for Automobile and Auto Components) |
| Outlay | ₹26,058 crore (budgetary allocation) |
| Tenure | Five years — FY 2023-24 to FY 2027-28 |
| Base year for incremental sales | FY 2019-20 |
| Product categories | Advanced Automotive Technology (AAT) vehicles + AAT components |
| Minimum DVA | 50% for components; higher for AAT vehicles |
| Incentive band | 8% to 18% of eligible incremental sales (tiered by product and value-add) |
| Implementation ministry | Ministry of Heavy Industries (MoHI) |
| Project Monitoring Agency | IFCI Limited |
| Sanction-to-credit lag | 30-90 days typical |
| GST treatment | Capital subsidy, not chargeable to GST |
| Income Tax treatment | Generally taxable as revenue receipt (Section 2(24)(xviii) framework) |
How is the PLI Auto scheme structured
The PLI Auto scheme was notified by MoHI as a five-year scheme targeting indigenisation of advanced automotive technology. Two beneficiary categories operate distinctly:
AAT vehicles — original equipment manufacturers (Tata Motors, Mahindra & Mahindra, Ashok Leyland, TVS, Bajaj, Hero, Ola Electric, others) producing electric, hydrogen fuel cell or advanced ICE vehicles with eligible-vehicle certification.
AAT components — component manufacturers producing battery management systems, on-board chargers, electric drivetrains, regenerative braking components, ADAS hardware, advanced safety and infotainment hardware. Eligibility is anchored on an eligible-products list maintained by MoHI.
Two participation tracks within each category — the Champion OEM track for large committed investments and the Component Champion track for component manufacturers — differ on committed-investment thresholds and incentive bands.
What does incremental sales calculation over FY 2019-20 mean
The scheme incentivises growth over a frozen base. Eligible incremental sales = (claim-year sales of AAT-certified products) minus (FY 2019-20 sales of the same product category at the same applicant entity). For a manufacturer that did not exist in FY 2019-20 or had nil AAT product sales, the base is zero — the entire claim-year AAT sales qualify as incremental.
Reconciliation must freeze the FY 2019-20 base ledger at scheme onboarding and audit-trail it for the full five-year tenure. Common reconciliation gaps:
- Product re-categorisation mid-scheme (a part renamed or BOM-revised) — the base-year mapping must follow
- Entity restructuring (demerger, slump sale) — the base-year sales must be allocated to the surviving applicant under the scheme’s transfer rules
- Export-versus-domestic classification — eligibility may differ; the base year and claim year must be split consistently
- GST credit-note adjustments to claim-year sales — net sales after credit notes are the correct numerator
Three-Way Match Exception Cost Calculator
Quantify the cost of unresolved PO-GRN-invoice exceptions across PLI-eligible production lines — exceptions that disrupt DVA certification audits also delay PMA review and bank credit.
Open the Exception Cost Calculator →How is DVA certified
Domestic Value Addition = (Sale Value − Imported Content Value) / Sale Value, expressed as percentage. Imported content includes the CIF value of all imported inputs (raw material, sub-components, sub-assemblies, software, technology licence) consumed in the product. Related-party imports must align to arm’s-length transfer-pricing benchmarks under Section 92 / Section 161 of the Income Tax Act 2025.
DVA certification is performed by a Chartered Engineer or a recognised independent agency on the basis of bill-of-material verification, customs Bill of Entry reconciliation, plant-level production records, and the applicant’s purchase ledger. The certificate is filed alongside the quarterly PLI claim. Common DVA reconciliation challenges:
- Imported-content tracking at component level when the same line uses both imported and domestic inputs interchangeably
- Software content in electronic components — licence fee classified as imported content per most opinions
- Royalty payments to foreign parent — typically classified as imported content for DVA purposes (also see Section 413 withholding obligations)
- Tooling depreciation when the tool itself was imported — proportionate imported content per unit produced
How does the PMA quarterly filing workflow run
Each quarter, the manufacturer files with IFCI Limited (the PMA):
- Audited quarterly eligible sales — by eligible product code, reconciled to GSTR-1 and audited financial books
- DVA certificate — Chartered Engineer or agency certified for the quarter
- Eligible-product certification reference — MoHI’s product approval number
- Committed-investment progress — cumulative capex deployed against scheme commitment
- Bank statements — for arm’s-length verification of revenue receipts
- Supporting financial statements — quarterly P&L, balance sheet extracts
PMA reviews documentation typically within 30-60 days, may raise clarifications, conducts physical verification at plant on a sampling basis annually, and issues a sanction letter quantifying the disbursable incentive for the quarter. The sanction may differ from the claim — typical disallowance reasons are DVA shortfall on specific SKUs, non-eligible product reclassification, committed-investment milestone failure, or documentation gaps. Disbursement follows sanction by 30-90 days as a single bank credit.
Worked example — ₹1,800 crore committed Tier 1 in Q2 FY 2026-27
- Committed investment under scheme: ₹1,800 crore over five years
- Cumulative capex deployed by Q2 FY 2026-27: ₹1,260 crore (70% of commitment)
- AAT-certified products: 4 SKUs (EV traction motor, motor controller, on-board charger, battery management ECU)
- FY 2019-20 base sales for these 4 products: ₹100 crore (frozen ledger)
- Q2 FY 2026-27 actual sales of these 4 products: ₹500 crore
- Eligible incremental sales: ₹400 crore
- DVA achieved: 58% (against 50% threshold) — DVA certificate filed
- Applicable incentive band: 15% (Component Champion track, Year 3, DVA band)
- Filed claim with IFCI: ₹60 crore
- Q1 FY 2026-27 sanction letter received: ₹48 crore (₹4 crore disallowed on DVA dispute over imported software content classification)
- Q1 bank credit received: 84 days post sanction — ₹48 crore
- Disallowance queued for appeal: ₹4 crore, target Q3 FY 2026-27 cycle
- Cumulative scheme-tenure realisation: ₹192 crore against an indicative full-tenure realisation envelope of ₹540 crore
What does Section 393(1)(k) overlay look like for PLI raw-material purchases
A Tier 1 buying raw material from domestic suppliers in volumes that count towards DVA must deduct Section 393(1)(k) TDS at code 1012 (legacy 194Q) at 0.1% on purchase value above ₹50 lakh aggregate per vendor per FY, applicable when the buyer’s turnover exceeds ₹10 crore. See Section 393(1)(k) purchase-of-goods TDS for manufacturers and Section 393 TDS new Income Tax Act reconciliation.
MoHI authority reference
For the live PLI Auto scheme framework, eligible-products list, value-add criteria, PMA appointment and disbursement workflow see the Ministry of Heavy Industries (MoHI).
What automated reconciliation changes
Manual PLI claim reconciliation across four overlapping quarterly cycles, the base-year frozen ledger, DVA computation per SKU, PMA filings, sanction-to-credit tracking and appeal queue management is a 3-4 person-week exercise per claim cycle at any meaningfully participating manufacturer. Purpose-built reconciliation software India configures PLI as a structured workflow — base-year ledger, DVA worksheet, PMA cadence, sanction-credit ageing, and appeal register all in one frame. TransactIG carries 24+ industry presets including PLI Auto. Customer outcomes include match-rate improvement from 51% to 88% on revenue-grade ledgers, and PLI claim cycle time compression. Build is two-to-four weeks on AWS Mumbai (ISO 27001:2022). For the inbound procurement match see three-way matching software India. For the full TDS code reference see TDS payment codes 1001-1092 India.