Tatas seek more tax sops
Gururaj Jamkhandi / Chennai/ Dharwad September 16, 2008, 3:26 IST
Even as the state government is making efforts to attract Tata Motors’ Nano car manufacturing unit from Singur in West Bengal to Dharwad, the Tatas are gearing up to commence functioning of their second unit — Tata Marcopolo — in the next couple of months.
Telcon, the earth-moving equipment maker which is a Tata group firm, has now sought the mega status and the benefits that accompany the status from April 2008.
The state government had given it an exemption from sales tax (both central and local) for a period of nine years from the date of commencement of production. This incentive was limited to 100 per cent of fixed asset deployed in the project.
However, the company said it could not enjoy the benefits due to a change in the central sales tax from 2 per cent to 10 per cent which reduced the sales by 20 per cent of the produce. The plant would have been eligible for the mega status if it invested Rs 100 crore or more in fixed assets by December 2002. Telcon, in a memorandum to Murugesh Nirani, minister for major and medium industries, said it could not reach the target of investing Rs 100 crore before 2002 due to the lack of infrastructure and no fillip from the state government.
It said the major policy initiatives in infrastructure came after 2002. The company has urged the government to issue an order to start the incentive again from April 1, 2008, or a suitable date as per the industrial policy or tax laws for the balance investments by way of refunding the sales tax/VAT paid.
Regarding Karnataka’s invitation to Tatas to set up the Nano car unit in Dharwad, top executives of Tatas are scheduled to have a meeting with chief minister Yeddyurappa in Bangalore on Thursday.
The unit is coming up on Garag road, 10 km from Dharwad, and work on the plant is nearing completion. It may be recalled that Tata Motors had announced a joint venture with Marcopolo, the Brazil-based global leader in body building and coaches, in May 2006.
Tata Motors had announced forming a 51:49 joint venture company with Marcopolo SA last year for the manufacture and assembly of fully-built luxury buses and coaches in India. It was scouting for land for what according to a senior Tata executive, would be amongst the “biggest bus plants in the world” and the state government sanctioned the required land in Neeralakatti panchayat limits.
Tatas have two units — Tata Motors Limited and Telcon — in Belur. Telcon, the company’s earth moving equipment subsidiary and a 60:40 partnership with Hitachi Construction Machinery Company, Japan, manufactures construction equipment. The state government had extended several fiscal benefits.
The plant commenced production in February 2001 and Tatas have till August 2008 invested Rs 141 crore in capital goods in Telcon’s Dharwad plant. Sources said the investment is expected to reach Rs 192 crore by March 2012.
Murugesh Nirani visited the plants on Monday and promised company representatives that the state government was keen to encourage the industrial growth and the demands would be considered.
