Tisco May Get 8-Year Tax Break For Crm

Tata Steel is likely to get a sales tax holiday for a period of up to eight years for its Rs 1,800-crore cold rolling mill project coming up at Jamshedpur.

This follows the Bihar government's decision to provide sales tax exemption, for an initial period of up to eight years, to any industry coming up in the state with an investment of over Rs 500 crore,.

The Tata Steel board is due to clear the project in the next two weeks.

The Bihar government's decision comes as part of the amendment to the state industrial policy announced earlier this year.

This makes Tata Steel , which has recently announced its decision to set up a Rs 1,800-crore cold rolling mill in Jamshedpur, eligible for the sales tax exemption, according to a company official spokesperson.

The construction for the proposed cold rolling mill (CRM) complex with a capacity of 1.2 million tonne is likely to be completed by the end of 1999, after the fourth and final phase of modernisation at Jamshedpur ends in September 1998.

The fourth phase of modernisation involves doubling of the capacity of the hot strip mill at Jamshedpur from one million tonne to two million tonne.

Forward integration in the form of new cold rolling mill at Jamshedpur will thus absorb the one million tonne excess capacity in hot rolled coils.

The company has already announced plans to set up a cold rolling mill at Gopalpur in the first phase of its proposed 10-million tonne greenfield plant in Orissa.

Nearly 2,700 hectare of land has been acquired at the site which is more than half of the required amount of 5,000 hectare. The technology and process for the project have been finalised.

However the infrastructure development for the project, which has been progressing along at a slow rate has been delaying the project.

This, together with the fact that Tata Steel is four months ahead of schedule in its fourth phase of modernisation, has forced the company to advance the schedule for setting up a cold rolling mill at Jamshedpur.

The company has, however, decided against relocating the cold rolling mill project at Gopalpur.

The tax holiday follows the Bihar governments move to provide exemption for an initial 8 years to any industry, investing Rs 500 crore in the state.