The Tamil Nadu Government has disputed Japanese automaker Nissan Motor ’s charge of delayed payment of $770 million (about ₹5,000 crore) under a sales tax incentive scheme. Nissan has dragged the State government to international arbitration; the government hopes it will be able to convince the company to negotiate a resolution.

A senior State Government official, who did not want to be named, said the company’s claims were “debatable” as it had interpreted the provisions for “accelerated returns.” He said that against incentives of about ₹1,600 crore paid over the past three years, the company believes the Tamil Nadu government owes it ₹1,300 crore more.

(According to a Reuters report, Nissan Motor is seeking over $770 million in dues under a 2008 agreement. It has sought international arbitration as repeated requests since 2015 have been overlooked. Its chairman Carlos Ghosn had soughtPrime Minister Narendra Modi’s assistance on this issue last year. Nissan’s lawyers had sent a notice to the State government in July 2016. A dozen meetings were held between officials from the company, the Centre and State government since then. The arbitration hearing is expected to start in mid-December.)

The official said the government has stuck to the incentive schedule agreed upon when it signed an MoU in 2008.

The State government had committed to sales tax refund as investment promotion subsidy; they were to be spread over a 21-year period with a cap of 115 per cent of investments. This is to ensure that job generation and investments made are sustained in the long term for the benefit of the State, the official said.

The Renault-Nissan global alliance has invested ₹4,500 crore for a 400,000-cars-a-year plant near Chennai.

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