Ashok Leyland-Nissan JV gets tax demand of Rs. 202 crore

Earlier this year, the joint venture between Ashok Leyland and Nissan ran into rough weather. It suffered a loss of Rs. 791 crore in the financial year 2014-15. Demand for its products was weak and the Ashok Leyland Stile, which was a badge-engineered Nissan Evalia was discontinued. The Dost small truck has also failed to make an impact in the market.

Now, the JV has received another setback. It has been sent a tax demand for Rs. 202 crore by the directorate of customs and intelligence. The factory machines, which were imported by the Renault-Nissan for the JV could also be seized. This is because the alliance had imported tools, robots and jigs under the Export Promotion Capital Goods scheme, which gives tax incentives for exports and the JV did not manage to ship any vehicle out of the country.

Renault-Nissan is reported to have sought a time of two months from the authorities to pay the penalty.

There were three JVs signed between Ashok Leyland and Nissan:

• Ashok Leyland Nissan Vehicles Ltd. - Ashok Leyland holds 51%, Nissan holds 49%
• Nissan Ashok Leyland Powertrain Pvt. Ltd. - Nissan holds a 51%, Ashok Leyland holds 49%
• Nissan Ashok Leyland Technologies Pvt. Ltd. - Ashok Leyland holds 50%, Nissan holds 50%

Nissan Ashok Leyland Technologies has reported to the BIFR after its net worth was wiped out by losses.

Source: Times of India