PLISFPI Claim Mechanics and Reconciliation for Indian Food Processing

A national food-processing entity in the MoFPI 53-beneficiary list closes its books on 31 March 2026 and turns to its PLISFPI claim filing for FY 2025-26 — the fifth claim year of the six-year scheme. The eligible-product segment is processed fruits and vegetables, the frozen FY 2019-20 base sales are ₹312 crore, and the FY 2025-26 segment-eligible sales sit at ₹746 crore. The incremental-sales base for the claim is therefore ₹434 crore, against which the scheme’s percentage matrix yields an illustrative claim of approximately ₹26 crore for the year. The reconciliation question, owned by the controller and the statutory audit partner, is not whether the company qualifies — it is whether the claim sales tie to GSTR-1, whether contract-manufactured output sits inside or outside the claim base, whether the FY 2020-21 plant-and-machinery investment counted toward the mandated investment can be evidenced from the fixed-asset register, and whether the Ind AS 20 books accrual versus Section 145B year-of-receipt recognition creates a deferred-tax timing difference the year-end provisioning has to capture. This is PLISFPI claim mechanics reconciliation India at the working level, and the discipline that resolves it determines whether the seven-month claim filing window closes with a clean audit pack or a re-filing exposure.

Quick reference

What the PLISFPI scheme actually is

PLISFPI is one of the thirteen sectoral Production Linked Incentive schemes notified by the Government of India, administered by the Ministry of Food Processing Industries. It carries a total outlay of ₹10,900 crore over a six-year tenure running from FY 2021-22 to FY 2026-27, with FY 2026-27 being the final eligible operational year — meaning that the scheme accepts incremental-sales claims for activity through 31 March 2027 and claim filings can run into the first half of FY 2027-28 within the seven-month post-year window. The scheme covers four product segments: ready-to-cook and ready-to-eat foods with millet-based products (Category I large applicants and Category II SMEs filing separately), processed fruits and vegetables, marine products, and mozzarella cheese. Branded organic products and millet-based RTC/RTE products attract higher percentage incentives within the published matrix.

The scheme’s claimable universe is fixed. MoFPI issued a DPIIT office order in July 2024 consolidating the list of 53 selected beneficiary entities — the closed set against which all residual scheme tenure claims are validated. The list spans large Category I applicants such as Hindustan Unilever, ITC, Britannia, Dabur, Nestle India, Tata Consumer, Varun Beverages, GCMMF (Amul), Parag Milk and Keventer Agro; SME applicants in the RTC/RTE and millet segment such as Bikaji, Bikanervala, Haldiram Snacks, Haldiram Foods International, Balaji Wafers and Anmol Industries; and a parallel set of beneficiaries in the marine products and mozzarella cheese segments. Entities outside the list cannot file PLISFPI claims regardless of qualifying activity.

The economic intent of PLISFPI is incremental output. The applicant declares its FY 2019-20 net sales of eligible products at the original application stage, and that base year is frozen for the duration of the scheme. Each claim year is computed as the difference between current-year segment-eligible sales and the FY 2019-20 base — not the difference against the immediately prior year. Two thresholds gate admissibility: a minimum sales threshold per applicant category (different absolute floors for Category I large applicants and Category II SMEs) that the current-year claim sales must exceed, and a minimum plant-and-machinery investment threshold that the applicant must meet cumulatively over the scheme tenure, with FY 2020-21 plant-and-machinery investment explicitly counting toward the mandated investment.

How the annual claim cycle actually runs

The annual claim cycle has four moving parts: the sales reconciliation, the investment certification, the audit pack, and the MoFPI claim filing. Each carries a separate evidence trail and each rolls up into the seven-month post-FY-end submission window.

The sales reconciliation begins with the company’s distributor management system or order-management feed. Segment-eligible products are isolated using the HSN carve-out per the approved application — the scheme defines eligible products at a sub-HSN level, narrower than the company’s GST HSN-2 reporting, so the claim engine must filter by the approved-product master rather than by reported HSN. Sales are aggregated by product, by region and by period; gross sales net of returns are taken for the claim base. The FY 2019-20 base sales filed in the original application are then loaded as the frozen reference, and the incremental sales for the claim year are computed as the simple difference. The reconciliation step ties the claim sales back to GSTR-1 outward supplies at the eligible-product level — adjusted for branch transfers (which sit in GSTR-1 but are not third-party sales) and for credit notes (which reduce GSTR-1 taxable value but may or may not reduce claim sales depending on the credit-note nature).

The investment certification is built from the fixed-asset register. Plant-and-machinery additions from 1 April 2020 onward are tagged eligible per scheme guidelines and cumulatively tracked against the applicant’s mandated investment threshold. The trace-out is to the capital-work-in-progress register, the date-of-commissioning evidence, and the original supplier invoice with the GST credit-note linkage. Contract-manufactured output uses a different evidence path — the principal manufacturer can include CM-route output in the claim base provided the CM relationship is documented and the TDS register under Section 393(1) Sl. 4 (legacy 194C, payment code 1001 for Individual/HUF contract manufacturers at 1% or payment code 1023 for other-than-Individual/HUF at 2%) shows the contract payment trail.

The audit pack assembles all four evidence layers under ICAI standards. The statutory auditor or a separately engaged audit firm issues an auditor’s certificate covering the FY 2019-20 base verification, the claim-year sales reconciliation, the plant-and-machinery investment certification, and the contract-manufacturer output inclusion. This certificate accompanies the claim filing.

The MoFPI claim filing is lodged through the scheme portal within seven months of FY-end. The Project Management Agency reviews the filing, runs its own scrutiny, and disburses against approved claim line items. Partial disbursements — typical for first-time filers — return rejection reasons by line item, which feed the next-year amendment cycle.

The accounting and tax overlay — Ind AS 20 versus Section 145B

The single most consequential timing decision in PLISFPI accounting is the gap between the books recognition and the income-tax recognition. The two operate on different rules.

Ind AS 20 — Accounting for Government Grants and Disclosure of Government Assistance — governs the books treatment. The standard requires that government grants related to income shall be recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs that the grants are intended to compensate. Two conditions must be satisfied before recognition: there must be reasonable assurance that the entity will comply with the conditions attached, and there must be reasonable assurance that the grant will be received. For PLISFPI, the conditions are the minimum-sales threshold and the minimum-investment threshold; the receipt assurance flows from the MoFPI selection and the documented claim mechanics. Once both conditions are met, the company can accrue the grant in the books as the incremental sales materialise — typically through quarterly or annual revaluation against the claim model — without waiting for MoFPI disbursement.

Section 145B of the Income-tax Act 2025 governs the income-tax treatment. The provision deems subsidies, grants, cash incentives, duty drawback, waiver, concession or reimbursement from the Central Government, State Government or any other authority to be the income of the previous year in which they are received, unless charged to income tax in any earlier previous year. For PLISFPI, this means the tax recognition is anchored to the MoFPI disbursement date — typically twelve to twenty-four months after the books accrual under Ind AS 20.

The result is a structural book-tax timing difference. The Ind AS 20 accrual in books drives a deferred-tax liability journal (because the income is recognised earlier in books than in tax), and the deferred-tax liability reverses when the MoFPI disbursement is finally received and the Section 145B income is taxed. The PLISFPI reconciliation pack must support this timing schedule with a per-claim-year trail — accrual amount, books recognition date, MoFPI disbursement amount, disbursement receipt date, and the deferred-tax movement for each pair.

A subsidiary tax surface is contract-manufacturing TDS. Where the principal manufacturer includes contract-manufactured output in the claim base, the contract payments to the CM are subject to TDS under Section 393(1) Sl. 4 of the Income-tax Act 2025 — code 1001 at 1% for Individual or HUF contract manufacturers and code 1023 at 2% for other-than-Individual/HUF deductees. The TDS register at deductee PAN level is the evidence supporting the CM-output inclusion in the claim base, and it ties to Form 26AS at quarter-end. Misclassification — for example, treating a job-work payment as a Section 393(1) Sl. 18 commission (legacy 194H) when it is a Sl. 4 contract — over-deducts and complicates the claim audit pack.

A worked example — a Category I processed fruits and vegetables beneficiary, FY 2025-26 claim

A Category I large applicant in the processed fruits and vegetables segment — one of the named MoFPI 53 beneficiaries — runs the claim cycle for FY 2025-26 (the fifth claim year of six). The frozen FY 2019-20 base sales of eligible products are ₹312 crore. FY 2025-26 segment-eligible sales come to ₹746 crore. The cumulative plant-and-machinery investment from 1 April 2020 through 31 March 2026 has reached ₹178 crore against the mandated threshold of ₹150 crore. Contract-manufactured output of ₹94 crore is included in the claim base, supported by Section 393(1) Sl. 4 code 1023 TDS deductions of ₹1.88 crore on contract payments through the year.

Illustrative — public disclosures do not reveal beneficiary-level claim amounts; the figures here are representative of the operating pattern of a Category I processed fruits and vegetables applicant, not actual entity data. Cross-verify against your own approved application, base-year audit pack and DMS export before action.

The reconciliation pack at FY-end 2026 looks like this.

The reconciliation surfaces four findings the controller must close before the seven-month filing window.

First, the GSTR-1 / GSTR-9 outward supplies on segment-eligible HSNs total ₹781.5 crore, but the claim sales come to ₹734 crore — a gap of ₹47.5 crore that decomposes into ₹39.2 crore of branch transfers (correctly excluded from claim sales because they are not third-party sales) and ₹8.3 crore of post-supply Section 34 credit notes (correctly netted in claim sales because the returns reduce the incremental output). The reconciliation memo documents both adjustments with GSTR-1 line references.

Second, the contract-manufactured output of ₹94 crore is included in the claim base. The TDS register under Section 393(1) Sl. 4 code 1023 shows total contract payments of ₹94 crore at 2% TDS = ₹1.88 crore, deducted across the year and matching Form 26AS at deductee PAN level. The CM relationship is documented through the master contract and the periodic work orders.

Third, the cumulative plant-and-machinery investment of ₹178 crore against the mandated threshold of ₹150 crore is comfortably above the floor. The fixed-asset register from 1 April 2020 (including FY 2020-21 investments, which count per scheme guidelines) is the supporting evidence, with date-of-commissioning entries and the original supplier invoices tagged.

Fourth, the books-side recognition under Ind AS 20 has already accrued ₹26 crore in FY 2025-26 P&L as the incremental sales materialised. The Section 145B income-tax recognition will wait until MoFPI disburses — anticipated in FY 2026-27 or FY 2027-28 — at which point the deferred-tax liability of approximately ₹6.5 crore booked at the 25% effective tax rate will reverse. The reconciliation pack carries the deferred-tax timing schedule for the year-end audit.

Common reconciliation breakages

• The FY 2019-20 base year sales declared in the original application differs from the MCA-filed audited financials because the scheme’s eligible-product carve-out is narrower than the company’s HSN-2 GST reporting, forcing a re-scoped base-year re-derivation that the audit pack must footnote explicitly.
• Contract-manufactured output is included in the claim base but the supporting Section 393(1) Sl. 4 TDS register is missing for one or more CMs, leaving an evidence gap that MoFPI scrutiny will surface and that can trigger partial disbursement against the CM portion.
• Plant-and-machinery investment certification cannot tie to the fixed-asset register because the FY 2020-21 starter investment was capitalised under a different cost centre or capex code at the time, and the asset master has to be retroactively re-tagged to the PLISFPI plan with the date-of-commissioning evidence intact.
• The Ind AS 20 books accrual is booked at the claim model amount but the MoFPI disbursement comes through partial, creating a books-side write-down in the disbursement year that the variance ledger must reconcile to the rejection reasons MoFPI returned.
• The September 2025 GST 2.0 transition under CBIC Notifications 09-16/2025-CTR re-rated several FMCG categories effective 22 September 2025 — for biscuits, chocolates and other consolidated 5% items the GSTR-1 outward supplies straddle the rate change, and the claim-year sales tie-out has to handle the pre- and post-22-September reconciliation without distorting the eligible-products carve-out.

How a reconciliation platform handles this

A platform-grade PLISFPI workflow ingests the company’s DMS sales feed in its native format, the GSTR-1 / GSTR-9 outward-supplies extract, the fixed-asset register from 1 April 2020 onward, the Section 393(1) Sl. 4 contract-manufacturer TDS register, and the MoFPI disbursement notice in its scanned-PDF form; ties them against the frozen FY 2019-20 base-year register and the approved-product master; classifies the variances by reconciliation code (eligible-products carve-out, branch transfer, return credit note, CM inclusion, investment threshold, disbursement shortfall); surfaces ageing buckets on the deferred-tax timing schedule; and produces an audit-ready claim pack that the ICAI-member auditor can sign and the company can lodge on the MoFPI portal within the seven-month window. The output runs through the same evidence-driven reconciliation software India discipline used for trade-spend, with the PLISFPI-specific schema layered on top.

For FMCG brands also reconciling trade promotion accrual versus payout cycles on the GT side and growth-over-base scheme reconciliation at the distributor level, the PLISFPI workstream sits alongside as the grant-accounting equivalent — the same base-year discipline, the same period-over-period increment computation, the same per-line variance classification. The modern trade settlement variance reconciliation coverage is also relevant where retail-chain settlements feed the GST sales tie-out that PLISFPI scrutiny then traces against the claim base. The commercial pillar for the segment is FMCG reconciliation software India, and the MoFPI scheme portal — the authoritative reference for the scheme guidelines and the 53-beneficiary DPIIT order — anchors the primary-source citation.

FAQ

The five FAQs above address the operational questions Indian food processing controllers and statutory auditors ask most often when filing the annual PLISFPI claim and reconciling the Ind AS 20 versus Section 145B timing gap.

Terra Insight Reconciliation Infrastructure

Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →

Published 27 June 2026

Domain expertise

TDS Reconciliation GST Input Credit Platform Settlements NACH Batch Matching Bank Reconciliation Form 26AS Matching ERP Integrations Enterprise Finance Ops

Reviewed by

NK

Navin Krishnan

Managing Director & Founder — Terra Insight

Ex Amazon India · Intuit QuickBooks · Tata nexarc

ISO 27001:2022 Patent Pending Incorporated 2024