Tamil Nadu

Tamil Nadu close to settling Nissan tax dispute

A file photograph of an employee installing components on the assembly line for Renault Nissan Automotive India Pvt. Ltd., at the company’s factory in Chennai. Photograph used for representational purposes only

A file photograph of an employee installing components on the assembly line for Renault Nissan Automotive India Pvt. Ltd., at the company’s factory in Chennai. Photograph used for representational purposes only   | Photo Credit: Dhiraj Singh/Bloomberg

The company had alleged that the State had not paid incentives to the tune of $770 million, but now a settlement has been reached, the State Industries secretary said

The Tamil Nadu government is close to settling its tax dispute with Japanese automaker Nissan Motor , with the State cabinet having already giving a nod to this. Soon, an agreement will be signed with the company, a top government official said.

The company had alleged that the State government has not paid incentives to the tune of $770 million with respect to its manufacturing plant at Oragadam on the outskirts of Chennai.

“The settlement agreement will be signed soon with the company, as the State cabinet has already given the nod,” N. Muruganandam, Industries Secretary, said, in reply to an audience query at a Confederation of Indian Industry conference on ‘Building Endurance in a Challenging Business Environment’ on Saturday.

K. Shanmugam, Chief Secretary, Government of Tamil Nadu pointed out that the dispute arose because Nissan changed its business model and wanted to claim the incentives which were spread over the years in an accelerated manner.

According to the conditions of the Memorandum of Understanding, the company is eligible to avail incentives of about ₹5,125 crore in around 21 years. The State Industries Department had alleged that the firm changed its business model which made them avail the incentives much before the completing of 21 years, as stipulated in the agreement.

“We had a long discussion with the company. They have understood our point of view. The Cabinet has approved to make the settlement in one go, so that issue is sorted out,” he added.

To a query on Apple products manufactured in the State, Mr. Muruganandam said the company did not want to publicise its plans. Foxconn’s plant in Sriperumbudur is making Apple products. “Slowly they are shifting some of the production from China. In the coming months we expect more investments and a shift from China,” he added.

To an audience question on lay-offs in the IT sector mainly at the middle level, Mr. Shanmugam said that the survival of the fittest applies not only to industries, but also to employees.

“You can’t fault the industries because they under competitive pressure to control cost and improve productivity. Employees need to constantly upgrade the skills and stay relevant to the industry. If you are skilful and productive no one is going to fire you,” he said.

Why you should pay for quality journalism - Click to know more

Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Apr 5, 2020 2:59:42 AM | https://www.thehindu.com/news/national/tamil-nadu/tamil-nadu-close-to-settling-nissan-tax-dispute/article30950334.ece

Next Story