The Gujarat government has given tax relief to car manufacturers Ford
and Peugeot for setting up their units in the state in the form of exemption from paying stamp duty and registration charges.
This was revealed in a written reply by Minister of State for Industries Saurabh Patel to a question asked by Congress president Arjun Modhvadia in the assembly on Friday.
According to Patel, besides exemption from paying stamp duty and registration charges, Ford would be getting refund of the Value Added Tax (VAT) that it would be paying for the next 15 years. Peugeot has also been offered relief with regard to payment of VAT.
The minister further stated that the government has signed state support agreement with Ford and Peugeot, while Indian car major Maruti Suzuki’s
proposal to set up a unit in the state was under consideration.
Ford which is present in India through a wholly-owned subsidiary Ford India, is investing approximately USD one billion to build a new vehicle manufacturing and engine plant in Gujarat. The first vehicle and engine are scheduled to come off the line in 2014.
The new facility at Sanand about 70 km from Gandhinagar is likely to create 5,000 jobs, and will be able to initially produce 2.40 lakh vehicles and 2.7 lakh engines per year.
French car maker Peugeot had performed ground breaking ceremony for its integrated manufacturing plant at Sanand in November last year and had projected to achieve full production capacity of 3,40,000 units by early 2016.
The facility being set up at an investment of around Euro 680 millions would also have a production capacity to make 1,00,000 engines annually.