The company, in a recent communique, has appealed to the state government to issue a clarification to the effect that sales tax exemption available under the Package Scheme of Incentives 1993 for mega projects in the automobile sector located in A category areas (Mumbai and Pune Metropolitan Region) is also available to all subsequent sales in Maharashtra or sales originating from the state without there being a MRP.

Telco's appeal has come in the wake of the state's decision to exempt sales tax for two years for the automobile projects with an investment of Rs 1,500 crore and above.

Telco said that for this purpose, the prices of vehicles (model wide, region wise) could be those "that the new unit/expansion unit would declare to the jurisdictional sales tax authorities and the concerned implementingagency from time to time".

"In the event it would take some time to issue this clarification/notification, we request that the entity or the dealer who is effecting the subsequent sale be allowed to do interim billing on the understanding that the notification will be made with retrospective effect - from the date of issue of eligibility certificate to the unit," the company added.

Telco has indicated that for extending the benefit available under the Package Scheme of Incentives 1993 to the consumer, the government, some time ago, had come out with a notification allowing exemption from sales tax not only on the first sale but also on subsequent sales in view of the VAT scheme of taxation. However, the company added that the benefit of this notification is applicable to packaged goods in which MRP is declared.

The company has also brought to the notice of the government that the Indica project has been located on a separate land adjacent to its existing facilities in Pune district and the land wasprocured in November 1994.

The capital expenditure on the Indica project incurred so far is as follows: land - Rs 28 crore, building, plant & machinery (inclusive of R&D expenditure of Rs 183 crore) - Rs 1,433 crore a total of Rs 1,461 crore.

The investment on this project is continuing and it hopes to cross the threshold limit of Rs 1,500 crore shortly. It will invest another Rs 200 crore by March this year and Rs 100 crore by September next. Telco has made it amply clear that these investments are exclusively made for the Indica project and can be clearly identified in the books of accounts. The company has added that the above figures constitute the gross block for this project and "no depreciation has been claimed so far."

Government sources told The Financial Express that they were satisfied with the information submitted by the company and said that the necessary government resolution on sales tax exemption will be issued in a day or two.