Yamaha (I) proposal on royalty payment rejected

Sanjay Sardana

New Delhi, Sept 20: The ministry of commerce and industry has rejected the proposal of Yamaha Motor India Limited to pay royalty to its Japanese parent Yamaha, and deferred the request of Honda Motorcycle & Scooter India to import new completely built units (CBUs) of two-wheelers from Honda of Japan.

Honda’s proposal has been referred to the core group of Foreign Investment Promotion Board (FIPB).

Yamaha Motor had sought permission for payment of royalty on sale of its motorcycle model YBX at the rate of $25 per unit (subject to tax) sold in Nepal and Bhutan for the three-year period from February 1996 to January 1999 and $30 per unit (subject to tax) from February 1999 to January 2003.

The department of heavy industries, the administrative ministry, recommended rejection on the ground that royalty was sought with retrospective effect.

On the other hand, in case of Honda Motorcycle & Scooter, the department of heavy industry supported the company’s proposal of importing new two-wheeler CBUs, but the commerce ministry sought deferment.

The issue has been referred to the core group of FIPB for its approval.