Earlier this year, Honda Motorcycle and Scooter India had announced that it had purchased land in Vithalapur, Ahmedabad district, for its fourth manufacturing plant in the country. It has now been revealed that the Japanese manufacturer will be getting a host of tax concessions from the Gujarat State government for this plant.
The announcement was made by the Chief Minister of the Gujarat, Mrs. Anadi Patel, in the question hour on the first day of the Gujarat Assembly session. The Gujarat government has signed a state support agreement which allows a number of tax sops for Honda, including a refund of net tax paid by the company for 15 years. The agreement also states that the government will waive off stamp duty and transfer charges on the land purchased by the company in Vithalapur as well as the electricity duty for five years.
The industry-friendly Gujarat government offers certain incentives for all projects which involve an investment of over Rs 1,000 crore. Honda has been negotiating the agreement with the Gujarat government for quite some time, and the deal was finally inked on September 30. Honda plans to invest about Rs 1,100 crore on this facility which would increase the company’s capacity by 10.2 lakh units per annum. Since its split with Hero MotoCorp, Honda has been on an expansion spree as it attempts to catch up with its ex joint venture partner, and capture a larger share of the world’s largest two-wheeler market.