Rs 2,900-cr tax dispute with Nissan resolved

“The tax and legacy issue with Nissan has been worked out. Chief Minister Edappadi K Palaniswami and the Cabinet have cleared the settlement package and we will sign the settlement deal soon,” Muruganandam said while responding to a query at a conference organised by the Confederation of Indian Industry here.

At the same time, Chief Secretary K Shanmugam clarified that the dispute arose because of a new production model Nissan had adopted at its manufacturing facility in Oragadam town, 55 km south of Chennai.

“The State government was not responsible for the problem. Nissan changed their production model all of a sudden for better incentives and went ahead with it without the government’s approval. Subsequently, the State government ratified it but Nissan made double claims with the help of the new model. As per their agreement with the government, the tax they pay would be reimbursed but in the new model they brought in an intermediary and filed for incentives as well,” said Shanmugam.

As per rules, cars sold in Tamil Nadu attract a VAT of 14.5 per cent, while those sold in other states pay 2 per cent and there is no duty imposed on exported cars. The manufacturing company, however, had charged 14.5 per cent VAT and sold their cars to group companies and applied for tax refund. The dispute arose when the state government stopped its refunds.

The Empowered Committee headed by Chief Minister Edappadi K Palaniswami has given clearance to 36 projects worth Rs 15,000 crore in the last two meetings, giving a chance to provide 23,000 jobs in the state, said Industries Minister MC Sampath on Saturday. “In the last 10 months alone, the state has attracted 63 new projects from the Memorandum of Understanding (MoU) that was initiated at the Global Investors Meet 2019,” he added. The Minister also said that out of 304 MoUs signed at the meet, 59 projects have started production already and 209 MoUs are in various stages of implementation. “All the approvals for new projects and expansions have now been made online and investors need not submit any documents manually. A special cell for investment promotion has been formed in the Chief Minister’s office for speeding up all projects,” Sampath said.