Entrepreneurs in Solar Manufacturing
Entrepreneurs in Solar Manufacturing:
a). If a Foreign or Indian Company which is sitting on losses (by using IPO money or Pvt company equity money with Funding), if establishes a Company in the same line of business by transferring the assets from the loss making units (issue of transfer pricing needs a check) to this NIMZ's new manufacturing unit with a Bloated CAPEX by drawing cues from large corporate companies in OIL Industry (CAG is doing post audit now), they can recover their losses with the 30% Capital Subsidy as announced by the Government for NIMZ policy.
b). Imagine a company has rs. 900 Crore losses (many also know how these losses are shown to reduce Corporate tax pay out as somewhere reported, am not sure) from their previous year operation from Solar or other Auto industry. Now it sets up a similar Industry in NIMZ zone (which is away from the present location). If the CAPEX shown in NIMZ factory with old and new machine mix as Rs. 500 Crore, in principle it will be eligible to get a free equity funding i.e 30% subsidy i.e 0.3 x 500 = Rs. 150 Crore. Thus, the losses (at once just after plant commissioning without hope of new business or job creation for next 10 years!!) are recovered and the same business can continue....
c). Are there any check to stop this kind of loss recovery at the Government cost?? Is this Subsidy regime ok or simply provide Interest subsidy (on investment and working capital equal to 30% subsidy amount) on the amount of yearly Sales made with genuine invoices, this will ensure that this company will continue for 10 years with sales and profit. If no sales or again loss, then, government need not support such companies / promoters..... Every year Interest subsidy payout will also improve government deficit as it will be a discounted Cash flow and in phases
a). If a Foreign or Indian Company which is sitting on losses (by using IPO money or Pvt company equity money with Funding), if establishes a Company in the same line of business by transferring the assets from the loss making units (issue of transfer pricing needs a check) to this NIMZ's new manufacturing unit with a Bloated CAPEX by drawing cues from large corporate companies in OIL Industry (CAG is doing post audit now), they can recover their losses with the 30% Capital Subsidy as announced by the Government for NIMZ policy.
b). Imagine a company has rs. 900 Crore losses (many also know how these losses are shown to reduce Corporate tax pay out as somewhere reported, am not sure) from their previous year operation from Solar or other Auto industry. Now it sets up a similar Industry in NIMZ zone (which is away from the present location). If the CAPEX shown in NIMZ factory with old and new machine mix as Rs. 500 Crore, in principle it will be eligible to get a free equity funding i.e 30% subsidy i.e 0.3 x 500 = Rs. 150 Crore. Thus, the losses (at once just after plant commissioning without hope of new business or job creation for next 10 years!!) are recovered and the same business can continue....
c). Are there any check to stop this kind of loss recovery at the Government cost?? Is this Subsidy regime ok or simply provide Interest subsidy (on investment and working capital equal to 30% subsidy amount) on the amount of yearly Sales made with genuine invoices, this will ensure that this company will continue for 10 years with sales and profit. If no sales or again loss, then, government need not support such companies / promoters..... Every year Interest subsidy payout will also improve government deficit as it will be a discounted Cash flow and in phases
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