On Wednesday, Gujarat Government advised Maruti Suzuki
India to get clarification about the legal and technical glitches that
may arise in two company model proposed by the Suzuki. The Suzuki is
looking forward to have its own wholly owned subsidiary for the new
production plant, which will sell produced cars to Maruti Suzuki India
Ltd.
The
company will make Rs. 4000 crore investment towards the facility, and
this meeting was intended to get clarification about possible legal
issues in future. Mr. Bhargava, Chairman, MSIL, said that “We briefed
the state about the two-company model and assured that our investment
plans for the state remain intact.”
In June, 2012 the company signed a state
support agreement with Gujarat Government for purchase of land and
setting up a plant. In January, 2014 MSIL board approved a plan in which
the proposed plant will be built by new subsidiary of Suzuki Motor,
Suzuki Motor Gujarat ltd.
The concern between government and
company arise about VAT refunds in the two-company model relating to
production and sales of produced units. As per the original plan, MSIL
was both producer and seller. However, Mr. Bhargava said that, “The
state has assured us that it is committed to the project.”
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