Karnataka government offers tax sops to HMSI's two-wheeler plant

The Karnataka Government has reportedly offered tax concessions to Honda Motorcycle and Scooter India (HMSI) for its investments in Narsapur in Kolar district. HSMI is investing about Rs 1,300 crore in the State to set up a two-wheeler plant with an annual capacity of 1.8 million scooters on 96 acres of Government allotted land.

The reports quoted S. Suresh Kumar, Minister for Law and Parliamentary Affairs, Justice and Municipal Administration as saying that the State Government has taken assurance from the company that 85 per cent of the jobs at all levels be reserved for local people. The HSMI plans to offer 3,200 direct employment and another 15,000 as indirect employment when the plant is fully functional in 16 to 18 months time. The Cabinet also cleared the Government's move to offer 40 per cent value added tax (VAT) payable by the company to the Government as interest-free loan for up to 10 years.

 It was mentioned in the reports that Suresh Kumar said, “The company will start repaying the loan from the 11th year. And the cabinet has also cleared 95 per cent reimbursement of CST for a period of five years. The State Government has decided to wave off 100 per cent of land registration cost as well. If the company fails to adhere to the conditions put forth by the government, then the benefits will be withdrawn.” For HSMI, plant at Kolar is the third manufacturing facility after Manesar in Haryana and Tapukara in Rajasthan. It was mentioned that the company had stated during the ground breaking ceremony last year that the product line-up in India includes three automatic scooters, six motorcycles in the 110cc to 250 cc segment, and three superbikes in the 1,000cc segment that are imported as completely built units.Automobile News