Nissan Seeks Rs 5,000 Crore From India Over Unpaid Tax Incentives

The Japanese automaker was promised tax incentives to set up car manufacturing plant in the country.

Japan-based automaker Nissan is reportedly livid with the Indian government’s lack of action against its pleas for unpaid tax incentives, and that’s going to pinch them hard with international arbitration set to take place later this month.

According to sources quoted in a Reuters report, Nissan is seeking over $770 million (Rs 5000 crore approx) in its dispute with the Indian government, after the automaker was promised payment as a part of agreement to set up car manufacturing plant in Chennai.

The Japanese automaker has sent out notice repeatedly, but after getting no response or payment from state officials, Nissan has decided it’s time to take the legal channel to get the matter resolved.

Multiple ministries assured Nissan that the payment will be duly done, and they won’t have to resort to legal processes to this done, but that has come to no avail even now.

The arbitration has been put in place, and the first hearing will reportedly take place in mid-December.

Nissan spokesperson highlighted that the company was willing to cooperate with the Indian government to come up with amicable resolution, without elaborating on the details. 

The first notice from Nissan lawyers was sent back in July 2016 to Prime Minister Narendra Modi, the report quotes the source, which was followed up by multiple meetings which involved federal and state officials along with Nissan executives, it adds.

In response to the ongoing matter, a senior Tamil Nadu state official quoted by Reuters said, that the government is looking to resolve the matter without heading in the direction of an international arbitration, and even pointed out there is discrepancy with regards to the due payment.

This ongoing controversy could be a big setback on the face of country’s ambitious Make in India project, which cites ease of setting up manufacturing plant in the country.

Also Read: Beyond Hype Over ‘Make in India’, Where Are the Jobs & Investment?

But if tax incentives, promised earlier, don’t get paid up, especially to global brands like Nissan, this could hamper the chances of other manufacturers looking to set up shop in India going forward.

(With inputs from Reuters)

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