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The PLI Auto scheme operates a ₹25,938 crore outlay across a five-year tenure with quarterly claim filing on the SIAM-DHI portal, PMA review by IFCI Limited, sanction-to-bank-credit lag of 30-90 days, disallowance handling, and reconciliation across the FY 2019-20 frozen base year, DVA-certified production, committed-investment milestones and the eventual bank receipt — running across four overlapping cycles per claim period for the full scheme tenure.
Maintain FY 2019-20 frozen base ledger per eligible product; compute claim-year incremental sales per quarter from audited financial books reconciled to GSTR-1; obtain DVA certificate per quarter at the SKU level; file with SIAM-DHI portal on quarterly cadence with documentation pack; track each filed claim through PMA review, clarification queue, sanction letter and bank credit; reconcile sanction amount against filed claim with disallowance reason; age sanction-to-bank-credit lag; queue disallowances for appeal in next cycle; book PLI receipt to correct GAAP ledger with appropriate GST and Income Tax treatment.
PLI eligible-product master with FY 2019-20 base sales frozen, DVA worksheet with imported-content tracking at the SKU level, committed-investment milestone register against scheme commitment, SIAM-DHI portal filing calendar (Q1 mid-Aug, Q2 mid-Nov, Q3 mid-Feb, Q4 mid-May), claim status workflow (drafted / filed / under-review / sanctioned / credited / appealed), bank-credit matching configuration against IFCI sanction-letter reference, disallowance register, GAAP-treatment flag per receipt.
A quarterly PLI claim dashboard for FY 2026-27 showing eligible incremental sales per AAT product, DVA percentage achieved versus threshold, claim band applied, filed claim amount with portal reference, IFCI sanction letter status with disbursement reference, bank-credit receipt date and amount, sanction-to-credit ageing, any disallowance amount queued for appeal, cumulative scheme-tenure incentive realised against committed envelope and committed-investment milestone status.
A Tier 1 EV-traction-motor and inverter supplier in Chennai closes Q2 FY 2026-27 and pulls the PLI ledger: ₹800 crore of AAT-eligible incremental sales over the FY 2019-20 base year on four certified products, 58 percent DVA against the 50 percent threshold, ₹4,200 crore of cumulative committed investment progress against a ₹4,200 crore commitment, and a 13 percent incentive band against the Component Champion track. The filed claim sits at around ₹35-40 crore of expected PLI receivable on the quarter, with a 5-month average sanction-to-bank-credit cycle running off Q1 data. The PLI Auto scheme claim process FY 2026-27 India workflow must track all of this across the SIAM-DHI portal filing, the IFCI Limited PMA review, the sanction letter timeline, and the eventual bank realisation — for each of four quarters in the year, on top of any open disallowance from prior cycles.
Quick reference
| Item | Value |
|---|---|
| Scheme | PLI Auto (Production Linked Incentive for Automobile and Auto Components) |
| Total outlay | ₹25,938 crore (with subsequent allocation revision to ~₹26,058 crore) |
| Tenure | FY 2023-24 to FY 2027-28 (FY 2026-27 is Year 4) |
| Base year for incremental-sales calculation | FY 2019-20 |
| Categories | AAT vehicles + AAT components |
| Participation tracks | Champion OEM (₹2,000 cr minimum investment); Component Champion (₹250 cr minimum) |
| Minimum DVA | 50 percent for components; higher for AAT vehicles |
| Incentive band | 8-18 percent of eligible incremental sales |
| Implementation ministry | Ministry of Heavy Industries (MoHI) |
| Filing portal | SIAM-DHI portal (MoHI-designated) |
| Project Monitoring Agency | IFCI Limited |
| Filing cadence FY 2026-27 | Q1 by mid-Aug, Q2 by mid-Nov, Q3 by mid-Feb, Q4 by mid-May |
| PMA review timeline | 30-60 days typical |
| Sanction-to-bank-credit lag | 30-90 days, 60-day average |
| GST treatment | Capital subsidy, not chargeable to GST |
| Income Tax treatment | Generally taxable as revenue receipt |
What is the PLI Auto scheme and what is the FY 2026-27 envelope
The PLI Auto scheme was notified by MoHI with a ₹25,938 crore outlay (subsequently allocated at around ₹26,058 crore) for a five-year tenure FY 2023-24 to FY 2027-28. It targets indigenisation of advanced automotive technology across two product categories — Advanced Automotive Technology vehicles and Advanced Automotive Technology components.
FY 2026-27 is Year 4 of the scheme and is one of the heavier disbursement years. Most committed-investment milestones cross the 50-70 percent mark by Year 3-4 and the corresponding committed-sales ramps are typically realised, so the per-claim incentive amounts in FY 2026-27 are materially higher than the Year 1-2 ramp years.
Two participation tracks operate within each category:
- Champion OEM — for large vehicle manufacturers (Tata Motors, Mahindra & Mahindra, Ashok Leyland, TVS, Bajaj, Hero, Ola Electric and similar) with a ₹2,000 crore minimum committed investment
- Component Champion — for component manufacturers with a ₹250 crore minimum committed investment
Committed-investment thresholds and incentive bands differ between tracks.
Who is eligible and on what basis
Eligibility is anchored on three pillars:
- Approved-applicant status — the entity must be on the MoHI-published approved applicant list under one of the two tracks, having submitted a committed-investment proposal at scheme onboarding and received an in-principle approval.
- Eligible-product certification — only products on the published AAT vehicles and AAT components list qualify. The list covers battery management systems, on-board chargers, electric drivetrains, regenerative braking components, ADAS hardware, advanced safety, EV-specific hardware, sensors, and similar advanced categories. Each eligible-product SKU is assigned a MoHI product approval number that is referenced in every claim.
- Minimum DVA — typically 50 percent for components, higher for AAT vehicles. DVA is certified per quarter by a Chartered Engineer or a recognised independent agency.
Suppliers who do not meet the cumulative committed-investment milestone at the end of each claim year forfeit eligibility for that year — and may face proportionate clawback on prior-year disbursements in extreme cases. The committed-investment register is therefore a continuous reconciliation, not an annual one.
What is the incentive band and how is incremental sales computed
The incentive band runs from 8 percent to 18 percent of eligible incremental sales, tiered by product category and DVA achieved:
- AAT vehicles: typically 13-18 percent (highest for fully indigenised EV platforms)
- AAT components: 8-13 percent (typically 13 percent at higher DVA bands for Component Champion track)
Eligible incremental sales = claim-year AAT-eligible sales − FY 2019-20 sales of the same product category at the same applicant entity.
The FY 2019-20 base is frozen at scheme onboarding and audit-trailed for the full scheme tenure. For an entity with no FY 2019-20 AAT sales the base is zero — full claim-year AAT sales qualify. Reconciliation gaps that commonly arise:
- Product re-categorisation mid-scheme — BOM revision or part renaming — the base-year mapping must follow
- Entity restructuring — demerger, slump sale — base-year sales must be allocated 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 — net sales after credit notes are the correct numerator
How does the FY 2026-27 claim filing workflow work
The claim is filed on the SIAM-DHI portal — the MoHI-designated implementation platform jointly operated under SIAM’s industry-secretariat function and the Department of Heavy Industries. Quarterly cadence for FY 2026-27:
- Q1 (Apr-Jun) — file by mid-August 2026
- Q2 (Jul-Sep) — file by mid-November 2026
- Q3 (Oct-Dec) — file by mid-February 2027
- Q4 (Jan-Mar) — file by mid-May 2027
The filing pack comprises:
- Audited quarterly eligible sales by AAT-eligible product code, reconciled to GSTR-1 and audited financial books
- DVA certificate for the quarter (Chartered Engineer or recognised agency)
- Eligible-product certification reference (MoHI 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)
IFCI Limited acts as the Project Monitoring Agency under MoHI for the duration of the scheme. PMA review:
- Documentation review typically completed within 30-60 days of filing
- Clarifications raised through the portal — supplier responds with supplementary documentation
- Physical verification at plant on a sampling basis annually for each approved applicant
- Sanction letter issued quantifying the disbursable incentive for the quarter
Disbursement follows the sanction letter typically within 30-90 days as a single bank credit, on average 60 days. The bank credit comes through the supplier’s principal banking relationship with the disbursement reference in the transaction narration.
Three-Way Match Exception Cost Calculator
Quantify the cost of unresolved PO-GRN-invoice exceptions on PLI-eligible production lines — exceptions that disrupt DVA certification audits also delay PMA review and bank credit.
Open the Exception Cost Calculator →How is the sanction letter reconciled and disallowance handled
The sanction letter may differ from the filed claim. Typical disallowance reasons:
- DVA shortfall on specific SKUs — one or two SKUs within the quarterly claim fail the certified 50 percent DVA threshold, IFCI disallows the incentive on those SKUs only
- Non-eligible product reclassification — IFCI reclassifies a particular SKU as outside the AAT components list
- Committed-investment milestone failure — cumulative investment is behind plan, proportionate disallowance
- Documentation gaps — invoice-level inconsistency between filing and audited books, partial disallowance pending re-filing
The disallowance is queued for appeal in the next cycle, with supplementary evidence — a fresh DVA certificate with a clearer imported-content trail, a product-classification opinion from a Chartered Engineer, an updated committed-investment statement. Successful appeals are credited as part of the next quarter’s sanction.
Reconciliation across four layers per claim cycle:
- Filed claim (what the supplier asked for)
- Sanction letter (what IFCI approved)
- Bank credit (what arrived and when)
- Disallowance queue (what to appeal next cycle)
Worked example — ₹4,200 crore committed Component Champion in FY 2026-27 Q2
- Approved applicant: Tier 1 EV-traction-motor and inverter supplier under Component Champion track
- Committed investment: ₹4,200 crore over five years
- Cumulative capex deployed by end of Q2 FY 2026-27: ₹4,200 crore (100 percent of commitment, ahead of schedule)
- AAT-eligible 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: ₹800 crore of AAT-eligible products
- Eligible incremental sales (Q2): ₹800 crore − (₹100 crore × 25% of FY 2019-20 base allocation to Q2) = ~₹775 crore on a quarterly base allocation
- DVA achieved: 58 percent against the 50 percent threshold — DVA certificate filed
- Applicable incentive band: 13 percent (Component Champion, Year 4, DVA-tier)
- Filed claim with IFCI for Q2: ~₹35-40 crore (band applied on eligible incremental sales)
- Filing reference logged on SIAM-DHI portal
- Q1 FY 2026-27 sanction letter status: received in early September 2026 at ~₹32 crore against a ~₹34 crore claim (₹2 crore disallowed on DVA dispute over imported software content classification in motor controller SKU)
- Q1 bank credit: arrived 58 days after sanction (early November 2026)
- Q1 disallowance queued for appeal: ₹2 crore, target Q3 FY 2026-27 cycle with revised DVA certificate
- Cumulative scheme-tenure realisation against committed envelope: ₹118 crore against an indicative full-tenure envelope of ~₹220-260 crore at planned ramp
What is the GST and Income Tax treatment of the PLI Auto receipt
- GST: PLI Auto incentive received from the government is generally treated as a capital subsidy not chargeable to GST under the current Section 15 framework — it is not consideration for any supply made by the recipient to the government. The view holds for both AAT vehicles and AAT components incentives.
- Income Tax: post the Finance Act 2015 amendment to Section 2(24)(xviii) of the Income Tax Act 1961 (carried forward in the Income Tax Act 2025 framework), government subsidies received in the nature of incentive are taxable as income unless specifically exempt or linked to a capital asset acquisition. Most opinions on PLI Auto treat the receipt as a revenue receipt taxable in the year of accrual or receipt depending on accounting policy. A minority position links the PLI incentive to the committed-investment milestone and treats it as a capital reserve — this position carries litigation risk and is best taken with a written tax-counsel opinion.
Finance must book PLI receipts to the correct ledger (revenue income or capital reserve, depending on the legal opinion) and tie the disclosure to the corporate tax return for the year.
What does the Section 393 overlay look like for PLI-related procurement
A Tier 1 buying domestic raw material — copper, electrical steel, rare-earth magnets where domestically sourced, semiconductor wafers — that counts towards DVA must deduct Section 393(1)(k) TDS at code 1012 (legacy 194Q) at 0.1 percent on purchase value above ₹50 lakh aggregate per vendor per FY, applicable when the buyer’s turnover exceeds ₹10 crore. For specialised foreign technology licences or royalty payments that count as imported content (and therefore reduce DVA), Section 413 withholding applies under the Income Tax Act 2025 framework at the treaty rate, with Form 15CA/15CB. For the full payment-code reference see TDS payment codes 1001-1092 India and the Section 393 TDS new Income Tax Act reconciliation.
For the broader cluster-level treatment see the sibling PLI Auto claim reconciliation which covers the operational reconciliation across the full scheme tenure, and the parallel auto component export incentive reconciliation which covers RoDTEP and Duty Drawback streams that often run alongside PLI on the same export-leaning programme.
MoHI authority reference
For the PLI Auto scheme notification, eligible-products list, value-add criteria, PMA framework, claim filing workflow and disbursement guidelines applicable to FY 2026-27 see the Ministry of Heavy Industries (MoHI).
What automated reconciliation changes
Manually running PLI claim filing across four overlapping cycles, the base-year frozen ledger, DVA computation per SKU, SIAM-DHI portal filing, sanction-to-credit tracking and appeal queue management is a 3-4 person-week exercise per claim cycle. Purpose-built auto component reconciliation software India holds the PLI eligible-product master, the FY 2019-20 frozen base-year ledger, the DVA worksheet, the SIAM-DHI filing calendar, the IFCI sanction-credit ageing register and the disallowance appeal queue in one frame. TransactIG carries 24+ industry presets including PLI Auto. Customer outcomes include match-rate improvement from 51 percent to 88 percent 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 sub-pillar see automotive component manufacturing reconciliation in India.