Following the publication of several misinformed articles in the print media over the last few days, Tata Steel has decided to put facts to the public through the media so that vested interests do not continue to distort the picture regarding the grant of Sales-tax exemption for Tata Steel's Cold Rolling Mills. In the wake of the Industrial Policy 1995, notified on 22/12/1995 under Notification No.478 and 479 and further amended by Resolution No.5680 dated 27/8/1997, Tata Steel decided to make a substantial investment for a Cold Rolling Steel Project in Bihar. In order to encourage industry and attract investment the set of Notifications identified thrust areas wherein Sales-tax incentives would be provided to all new units or existing units undertaking Expansion/Modernisation/ Diversification. All raw material for such units would be free of Sales-tax for purchase within the State of Bihar and exempt from Sales-tax on sale of finished products ex Bihar (now Jharkhand) for a period of 8 to 10 years depending upon the location. There are four essential conditions laid down for availing Sales-tax exemption under the Bihar's Industrial Policy 1995 all of which have been strictly complied with by Tata Steel.

The four conditions are -

1. Units should fall under identified thrust area

2. Investment should be made in case of existing industries going in for Diversification

3. As a result of Diversification, products should be new products not produced by the existing units, and

4. Units should hold land in its own name or under lease agreements

Tata Steel's position with regard to the four essential conditions is as follows :-

1. Units should fall under identified thrust areas - Extracts of relevant portion of the Industrial Policy as well as the Notifications No.SO/57 &58 dated 2/3/2000 - the scope to cover "Metallurgical industries as one of the thrust areas". Tata Steel as well as its constituent Cold Rolling Mills are Metallurgical industries.

2. Investment should be made in case of existing Industries going in for Diversification - Tata Steel has made an investment of more than Rs 1300 crores so far in setting up of the Cold Rolling Mills.

3. As a result of the Diversification products should be new products not produced earlier by the existing unit -Tata Steel's Steel Works at Jamshedpur, located in Bihar (now Jharkhand), has not been producing Cold Rolled steel products so far. This is a new product for the Steel Works at Jamshedpur.

4. Units should hold land in its own name or under lease agreements - The land on which the Tisco Works stands is 1,729.27 acres and stands permanently settled in the name of M/s Tata Iron & Steel Company from 1-1-1956 under section 7(1) of the Bihar Land Reforms Act, 1950. As the land is permanently settled in the name of the Steel Company, the question of renewal of lease with regard to the said land does not arise. The factory lands have been settled with the Steel Company in perpetuity and only lands outside the Steel Works are those where the lease is under renewal.

The Dy Commissioner of Commercial Taxes/Jt Commissioner, Commercial Taxes held 11 hearings between 2-9-2000 to 1-12-2000. During these hearings various documents, information, proof were sought which were complied with. The Jt. Commissioner, Commercial Taxes, approved the issue of exemption on 16-12-2000. After approval of the Jt.Commissioner, Commercial Taxes (Admn), the Dy.Commissioner issued exemption certificate to Tata Steel granting of Sales-tax on purchase of raw materials within the State of Bihar (now the State of Jharkhand) and Sales-tax exemption on direct sale of Cold Rolled products ex-State of Bihar (Now ex-State of Jharkhand) on 21-12-2000 with effect from August 1, 2000 i.e. the date of declaration of commercial production.