Auto majors commit investments of Rs 11,510 crore in Maharashtra

The agreements come two days after the government decided to restore VAT set-off claims to gross sales.

By: Express News Service | Mumbai | Updated: August 29, 2014 10:50:17 am

Maharashtra government on Thursday signed four agreements with leading auto companies, involving an investment of Rs 11,510 crore.

The agreements were signed with domestic auto majors Tata Motors, Mahindra & Mahindra and Bajaj Auto, and German auto major Volkswagen.

Under the agreements, Tata Motors and Mahindra will invest Rs 4,000 crore each, Bajaj Auto will pump in Rs 2,000 crore while Volkswagen will invest Rs 1,510 crore in existing facilities.

The agreements come two days after the government decided to restore VAT set-off claims to gross sales. Earlier the set-off claims were restored on net sales.

The incentive would be applicable only to projects in the ‘ultra mega projects’ category, which refers to projects that are worth more than Rs 1,500 crore and employ 3,000 people. “This would be beneficial to industries as it will also take into consideration their input taxes. However, the set off claims cannot exceed 12.5 percent,” a senior state government official said.

With certain industrial zones having more incentives than others, the state government is also considering reclassifying them, the official said.

Maharashtra Chief Minister Prithviraj Chavan said, “A set of decisions that we have recently taken makes Maharashtra the most attractive destination, especially for the automobile industry. There are a few irritants that are still left in the industrial policy, but as we go ahead we will keep fine-tuning it.”

Earlier, the state government had signed MoUs worth Rs 23,000 crore before the Lok Sabha elections in February this year, and worth Rs 15,000 crore in Nagpur last year.

State chief secretary Swadheen Kshatriya also said that the state government has had a meeting with the Centre recently to identify problems that industries in Maharashtra are currently facing, and would come up with solutions.

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