Krrish fails another payment deadline; new crisis
The long-delayed Krrish project in Fort has passed yet another deadline – the final 15 per cent payment of US$ 449 million (about Rs. 59 billion) which was due on January 31 – to start construction.
Furthermore fresh issues are surfacing. According to authoritative sources, the Urban Development Authority (UDA) is insisting that Delhi-based Krrish must additionally pay 15 per cent as a land lease tax, that didn’t figure in the payment schedule last year. This means Krrish has to pay a total of 30 per cent in lease rental fees, up from 15 per cent at the end of 2013, and amounting to about $134.7 million or Rs.1.75 billion.
The project has been stalled by delays in the lease payments amidst extensions and penalties since Krrish signed the agreement with the Board of Investment and the Urban Development Authority in August 2012 for a mixed development project in Fort.
The sources said that the new 15 per cent land lease tax for foreigners was enforced in the 2013 budget presented in November 2012, a few months after the Krrish agreement was signed. While Krrish is believed to have said that it is not liable to pay this tax as it didn’t exist at the time the agreement was signed, Treasury officials insist that the rule was with retrospective effect, ie effective to agreements signed prior to November 2012.
The sources said the UDA thus is now insisting that a total of 30 per cent of the $449 million has to be paid as the final payment before the project can kick off. Krrish, the sources added, is urging that this 15 per cent land lease tax be waived as it didn’t exist at the time the agreement was signed.