TAL Manufacturing Solutions fails to

get duty sops on Sukhoi order

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Shishir Arya, TNN | Aug 6, 2014, 01.39AM IST
NAGPUR: Tata Group company TAL
Manufacturing Solutions, which has bagged a
prestigious order to manufacture high-end components for Sukhoi-30 fighter aircraft, has failed to secure a duty exemption at Mihan. The
exemption had been sought on the grounds that the job will be executed at its unit in the Mihan-special economic zone (SEZ), and would serve a
national interest.
The order was secured from PSU aircraft maker Hindustan Aeronautics Limited (HAL). Since production is planned in the SEZ, TAL had moved an
application before the board of approvals (BOA) under the ministry of commerce to get a customs duty waiver. Units in SEZs get tax exemptions as
they fulfil an export obligation.
However, even as the supplies in this case will be routed to HAL, which is a domestic consumer, TAL had pressed for a duty waiver on the grounds
that it will be serving national interest by executing the order. However, the BOA, which is a body governing SEZs, rejected the plea. TAL wanted a
waiver on the material to be procured from abroad for making the aircraft components.
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The minutes of the BOA meeting held last month say that TAL's plea has been rejected as there is no provision of waiver for supplies made to a
domestic tariff area (DTA) unit in the SEZ Act or the rules.
On the other hand, TAL's plea had said "by executing the project the company is participating in projects of national interest, however, the customs
duty applicable to the material was the major obstacle in the process". The Sukhoi aircraft will be finally supplied to the Indian Air Force by HAL.
Senior officials at TAL's unit in Mihan refused to comment, just as they refuted any plans to make any components for Sukhoi-30 at the unit in
Mihan-SEZ. TAL has taken up land at Mihan to manufacture floor beams to be used in Boeing's Dreamliner aircraft. "The progress on this front is
going on gradually," said a TAL official not wishing to be named. TAL is reported to have delivered the first floor beam for the aircraft recently.
However, MADC sources confirmed plans to manufacture high-end parts of the fighter aircraft at the Mihan unit. The source says even as BOA has
rejected the proposals there are plans to submit a fresh proposal directly to the ministry of commerce. It is hoped that an exemption may be granted
as a special case.
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