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24. May 2012

GER - Volkswagen puts hold investment in Maharashtra

German auto major Volkswagen AG said it has put on hold the proposed INR 2,000 crore investment plan in India as the VAT refund issue with the Maharashtra government remains unresolved.

Volkswagen Group Chief Representative India John Chacko told PTI that "The normal investments required for usual operations of the company is going on but the big plans for the future have been put on hold at the moment.”

He was responding to a query on whether the ongoing issue with the Maharashtra government over the change in policy regarding VAT refund has impacted the group's expansion plans, including the INR 2,000 crore investment announced in January.

Earlier, to woo investors, the state government used to refund VAT paid on all vehicles sold by companies, which have factories in the state.

It was, however, modified last year and the state government said it would refund VAT only on vehicles sold within the state.

Stating that the group wants the state government to keep its commitments, Mr Chacko said that "We are talking to the state government to sort out the issue. We want to work in a stable conducive environment and would like to get what was committed to us."

Asked what would be the group's next step if the state government sticks to its stand, he said that "We will cross the bridge when it comes."



Source - Economic Times

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