Latest Car News in India

Tuesday, February 28, 2012

By Pawan Rana

Narendra Modi led Gujarat government offers tax heavens to Ford and Peugeot

The Narendra Modi led state government of Gujarat, which has been working aggressively to make Gujarat an auto industry hub, had offered a number of tax benefits to the car makers like US based Ford and France based Peugeot for setting-up their manufacturing units in the state.  Mr. Saurabh Patel, Minister of State for Industries, recently revealed in assembly that the tax benefits were given in the form of exemption of registration charges and stamp duty. Mr. Patel replaying a question of Congress party President Arjun Modhvadiya in the assembly.

The Gujarat government given a number of other benefits to the Ford Motors besides offering exemption in registration charges and stamp duty that includes a proposal of refund in the Value Added Tax (VAT) that the car maker would be paying for next one and a half decade. The government offered similar relief related to VAT payment to the French car maker Peugeot.


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Ford India, which already has a manufacturing unit in Chennai (Tamil Nadu), has lined-up an investment of USD one billion to set-up a new vehicle as well as engine manufacturing plants in the state of Gujarat. The company has planned-up to state rolling-out engines and cars from this plant by year 2014. Initially, the facility will be having an output of 2.7 lakh power-trains and 2.4 lakh vehicles per year.

The plant of Peugeot on the other hand, will be coming up by year 2016 and will be having an annual capacity of 3,40,000 units along with producing as many as 1 lakh engines per annum. The firm plans to invest a sum of Euro 680 millions to set-up this plant.

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