Coca-Cola Gets Clean Chit On Sales Tax Sops Claim

Coca-Cola India has been given a clean chit by Sicom in respect of charges levelled against the multinational corporation (MNC) for having allegedly availed sales tax incentives for machinery shifted from the Mumbai and Pune units to the Wada unit, which did not constitute new purchases.

Senior BJP leader Prakash Jawdekar had levelled the charges on the floor of the Maharashtra Legislative Assembly during the Monsoon Session following which the state government had asked Sicom to provide details of the case.

Sicom general manager (incentives) J S Pal said: "After the state government sought information from this department, we carried out a physical inspection. Besides, the chartered accountant (Arvind L Gurav) certificate required while claiming these incentives provides a list of machinery freshly purchased (amounting to Rs 86 crore), besides vouchers of the fresh investment made on the unit on which the incentive was given."

Pal added that machinery worth Rs 105 crore was being used in the Wada plant of Coca-Cola India of which only Rs 86 crore worth constituted fresh purchases while Rs 14 crore machinery was shifted from the Mumbai unit of the MNC and the remainder from the Pune unit.

"On the basis of the new purchases of machinery as well as the total investment of Rs 175 crore (including land, building etc) an incentive of Rs 42 crore was given to Coca-Cola India. The high incentive is also a reflection of the fact that the unit has been set up in Wada which falls under the D+ category, which constitutes the most backward region in Maharashtra (eligible for the highest level of ST incentives)," he said.

The Wada unit began operations from January 2000 in the wake of which the earlier arrangement with the Pune Bottling Company, a franchise of Coca-Cola was discontinued. The Mumbai unit of Parle, acquired by Coca-Cola also ceased operations with around 900 workmen remaining without work.

According to a industry department official in the Mantralaya, "Machinery worth Rs 7.56 crore from the Pune unit and Rs 14 crore from the Mumbai unit were shifted to Wada by Coca-Cola on which they were given no ST incentives. Moreover, these machines are lying idle at the Wada unit, according to Coca-Cola that is seeking to dispose the same off as scrap."