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TN urges HC to restrain Nissan plea
Pursuant to Nissan initiating International arbitration proceedings against the Union government, seeking $770 million on the dispute over refund of value added tax (VAT) and another on the pace of refund of VAT accruals, the Tamil Nadu Government has moved the Madras High Court seeking to restrain Nissan Motor Company Limited in Japan and its local unit in SIPCOT in Sriperumbudur.
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Chennai
Justice Anitha Sumant, before whom the original application from the TN State Industries department came up on Monday, ordered notice to the authorities concerned.
Tamil Nadu Industries Secretary Atulya Mishra on behalf of the State government, submitted that the steep increase in the output tax during 2012-13 and 2013-14 had raised certain queries and thereafter, it was found out that the two companies had changed their business model from April 1, 2012 by treating its consortium members Renault Nissan Automotive India Private Limited (RNAIPL) as a manufacturing company and Nissan Motor India Private Limited (NNIPL) as a marketing company, thus showing that the entire sales were done within the State.
In their petition seeking to restrain Nissan Motory Company Limited in Japan and its local unit from proceeding with international arbitration, the state claimed that following a change in Nissan’s business model, a product which was sold either by Renault or Nissan Consortium, which gains input value gets that subsidy to that extent. However, some products, if sold to the marketing company NMIPL, could also result in subsidy for input as well as on the sales. Hence there is a scope for enjoying
double benefit of input as well as output value. The Industries Secretary also submitted that the writ petitions are not maintainable in law as the field was governed by the memorandum of understanding which contained arbitration clause. Therefore, without availing this alternative remedy, the writ petitions were filed, and they were not maintainable in law, Atulya Mishra said in the government’s plea.
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