Nissan-Leyland hits a Rs 202cr tax bump over export failure

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Added in: Ashok Leyland

Ashok Leyland Dost-2

The joint venture (JV) between auto majors Nissan and Ashok Leyland for small trucks is beset with a fine of Rs.202 crore tax demand over non-fulfillment of export obligations. The tax demand is slapped by the directorate of customs and intelligence. Customs have also threatened to seize factory machines of Renault-Nissan’s automotive plant in Oragadam.

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Incorporated in 2008, Japanese auto major Nissan and Hinduja-owned commercial vehicle manufacturer, Ashok Leyland signed three joint ventures for small trucks or the light commercial vehicles business. The company then had imported tools, robots and jigs for the joint venture under Export Promotion Capital Goods (EPCG) scheme that gives tax incentives for exports. Since no vehicles were exported, the notice is issued. As reports suggest Renault-Nissan alliance has sought two months’ time from the customs authorities to pay up. No updates from Ashok Leyland as of yet.

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The 7-seater multi-purpose vehicle (MPV), Stile, also struggled to take off amid mounting losses.The joint ventures started off well with the launch of a pick-up truck called Dost in 2011. After getting sufficient control over the market share, the company unveiled plans to set up another plant on the outskirts of Chennai with an investment of Rs 4,150 crore in order to produce LCVs. The plan remains on hold due to poor sales.

 

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