Chinese real estate major Dalian Wanda requests tax benefits for investments in India
After committing investments upwards of $10 billion in India, Chinese real estate major Dalian Wanda has requested a list of corporate tax breaks for the company.
In January, the Wanda Group had revealed plans to invest $10 billion in the country, the vast majority of which would go into an industrial park at Kharkhoda near Sonepat in Haryana.
The company would be the lead investor in the initial infrastructure and would ask Chinese firms to take part. The construction in the first phase of the 13-square-kilometre park in Haryana is expected to start this year, the firm had said.
However, the Chinese company has asked for a series of concessions on corporate and service tax, officials at the Department of Industrial Policy and Promotions (DIPP) said under conditions of anonymity. This includes concessions on service and corporate taxes.
“What they are asking is their investment zone be turned effectively into a SEZ,” an official said. The government currently charges 20.5% Minimum Alternate Tax (including cess) on SEZ developers and units as well as Dividend Distribution Tax (DDT) on developers.
While the Wanda group is still finalising the list of units to be set up within the park and reaching out to other Chinese firms, it has requested that tax benefits be extended to these companies as well, the official added.
Wang Jianlin, who with an estimated net worth of more than $28 billion is China’s wealthiest man, leads the group. Jianlin had met Prime Minister Narendra Modi twice this year to discuss investment opportunities in the country.
On Monday, news reports also suggested that the government has asked Wanda to group to bring in $10 billion as external commercial borrowings (ECBs) since currently the permitted limit is till $750 million. Reportedly, DIPP has suggested the matter to the Reserve Bank of India.
Earlier this month, media reports had suggested that Wanda group, which also owns China’s largest multiplex chain was interested in buying into Indian Multiplex chain PVR, the largest in the country. However, PVR later denied reports of any deal.
The Wanda group entered India through a deal with the Reliance Group in December 2012 for setting up a joint venture for building integrated township projects in India.
The group is by some estimates the largest real estate developer in China.