The Department for Promotion of Industry and Internal Trade (DPIIT) issued a compliance circular in May 2026 requiring all PLI auto-component manufacturers to reconcile their capital expenditure records against audited financial statements. This is the first mandatory audit window under the revised PLI guidelines, and non-compliance triggers a mandatory 15–25% clawback of incentives earned in FY 2024–25.
Manufacturers must file revised capex affidavits and supporting documentation by 30 June 2026. Many mid-sized component makers are unaware of the new evidence threshold and risk losing significant cash support.
Market signals
DPIIT now requires bank statements and vendor invoices to substantiate every capex claim above ₹50 lakhs. Affidavits alone no longer suffice. This shift reflects auditor findings of inflated capex claims in the first tranche of PLI payouts.
Shortfalls under 10% incur 15% clawback; shortfalls of 10–25% incur 25% clawback. The penalty is applied to all incentive payments made in that fiscal year, not just the disputed amount, creating material cash impact.
State pollution and factory inspectorates now receive PLI capex schedules automatically. Mismatches between reported capex and on-site inspection records trigger DPIIT investigation and potential de-listing from the scheme.
Under the PLI Scheme for Automobiles & Auto Components, all manufacturers must comply with DPIIT's revised capex verification protocol by 30 June 2026. Non-compliance invokes clawback under Section 25 of the PLI Rules, 2021. Vinayakam Consultants helps manufacturers reconcile capex records, substantiate claims with authentic documentation, prepare revised affidavits compliant with the new threshold, and liaise with statutory auditors to obtain signed capex certificates. We conduct a pre-filing capex audit to identify and remediate discrepancies before submission, reducing clawback exposure.
Your action checklist
- Obtain a signed capex certificate from your statutory auditor (CA) covering FY 2024–25 and FY 2025–26, citing bank statements, invoices, and fixed-asset registers as supporting evidence.
- Cross-check all capex items above ₹50 lakhs against vendor invoices, payment receipts, and asset-purchase orders; document any shortfalls or reclassifications now.
- Prepare a revised capex statement (Form PLI-103) with updated figures and attach a cover memo explaining any changes from your original claim; file via the PLI portal before 30 June 2026.
- Inform your state pollution control board and district factory inspector of your PLI capex filing; request they do not flag discrepancies separately to DPIIT during routine inspections.
Frequently asked questions
Non-compliance by 30 June 2026 triggers a mandatory 15–25% clawback of incentives earned in FY 2024–25, depending on the capex shortfall percentage.
Bank statements and vendor invoices are now mandatory to substantiate every capex claim above ₹50 lakhs; affidavits alone no longer suffice under the revised guidelines.
State pollution and factory inspectorates automatically receive PLI capex schedules; mismatches with on-site records trigger DPIIT investigation and potential scheme de-listing.