Foxconn gets a breather as Karnataka govt asks gram panchayats not to act on tax notices

Bengaluru Rural Zilla Panchayat CEO Anuradha KN conveyed the government’s decision to the gram panchayats of Koira and Vishwanathapura, in whose limits the 300-acre Foxconn facility in Devanahalli, near Bengaluru international airport, falls.

The Koira gram panchayat’s notice threatened to seize movable properties from the Foxconn premises, equal in value to its tax claim of Rs 12 lakh. The Vishwanathapura panchayat sought details of structures being built on the premises, the sanctioned plan, extent of vacant land, etc., to determine the taxes.

On January 29, the government had issued a notification declaring 3,118 acres of land in Devanahalli taluk, including that of Foxconn facility, as part of the Devanahalli Special Investment Region. The government, citing the notification, informed the two gram panchayats that they must deal only with the Karnataka Industrial Areas Development Board (KIADB) and not proceed against Foxconn.

The KIADB will now transfer 30% of the taxes collected from companies to gram panchayats and use the rest to upgrade the infrastructure in the industrial area. "The Foxconn facility came under the limits of two gram panchayats. They issued notices eight times before demanding payment of tax dues, but the company did not reply. Now that the area comes under special investment region, the gram panchayats cannot issue notices," Anuradha said in a statement. The industries department has also written a separate letter to the rural and panchayat raj department.

Gram panchayats come under the rural development and panchayat raj department led by Priyank Kharge, who’s also the information technology and biotechnology minister.

Foxconn assembles smartphones for Apple and other major brands at the Devanahalli plant. It has pledged to invest Rs 22,000 crore in phases to create a facility to assemble 20 million smartphones a year.