Foxconn gets tax demand notice from two gram panchayats, industries dept to intervene

Bengaluru: Taiwanese contract manufacturer Foxconn (Hon Hai Precision Industry Co) has been slapped with notices by two gram panchayats asking it to pay local taxes and furnish details of land use, triggering a storm for the ruling Congress as it struggles to woo global investors in emerging technologies.

The 300-acre Foxconn facility in Devanahalli taluk near the international airport in Bengaluru comes under the limits of Vishwanathapura and Koira gram panchayats, and both have issued notices.

The Panchayat Raj department comes under minister Priyank Kharge who also oversees IT/BT departments.


The Taiwanese electronics giant assembles smartphones for Apple Inc and other major brands at the modern facility in Devanahalli taluk near Bengaluru international airport and pledged to invest Rs 21,911 crore in phases.

Karnataka’s industries department said it will intervene with the panchayat raj department over issues raised by Koira gram panchayat related to Taiwanese contract manufacturer Foxconn which operates in the area.

Principal Secretary (commerce & industries) S Selvakumar told ET that the panchayat’s action follows lack of understanding of the law. The Foxconn unit is part of Devanahalli industrial area developed by the Karnataka Industrial Areas Development Board (KIADB). These are also industrial areas notified as special investment regions covered under the Karnataka Special Investment Region Act, 2022, and managed by KIADB only.

“These companies pay the entire tax to the KIADB which uses 70% of it for development of the industrial area and transfers 30% of taxes to the gram panchayat concerned. We are taking it up with the panchayat raj department and clarifying on this,” Selvakumar said.

Panchayat officials told ET that the company must inform the panchayat concerned details including the extent of land use and the built up area, if it has taken up any construction, details of sanctioned plans and taxes paid, if any, to the KIADB under the Karnataka Gram Swaraj and Panchayat Raj Act, 1993. The company will have to reply to the notice or pay taxes within one month. If the company does not respond, the gram panchayat has the authority under the law to seize the immovable property and auction them to recover the dues, the officials explained.

In May last year, the state government announced it was releasing incentives worth Rs 6,970 crore to the company under Karnataka’s electronics system design and manufacturing policy.

Foxconn is the first electronics company to get such a large amount as incentives from the state, as Karnataka seeks to bolster its footprint in high-end electronics manufacturing.