Foxconn land notified as Special Investment Region, gram panchayat tax notices withdrawn

Bengaluru

The dispute over tax notices issued to Taiwanese electronics major Foxconn by local gram panchayats in Devanahalli taluk has effectively been resolved after the Karnataka government notified the company’s land as a Special Investment Region (SIR), bringing it outside the jurisdiction of village panchayats.

The 300-acre land parcel allotted to iPhone manufacturing company, located within the limits of Vishwanathapura and Koira gram panchayats in Bengaluru Rural district, was officially declared a Special Investment Region on January 29, according to district authorities. Following this notification, all property tax notices earlier issued by the two gram panchayats to the company have been withdrawn.

Confirming the development, Bengaluru Rural Zilla Panchayat Chief Executive Officer K N Anuradha said on Tuesday that the gram panchayats no longer have the authority to levy or demand taxes from Foxconn, as the area now falls under a special industrial governance framework. She has formally communicated this position to the Secretary of the Rural Development and Panchayat Raj Department.

Until the SIR notification, the Foxconn land technically fell within gram panchayat limits, prompting local bodies to issue as many as eight tax notices to the company, asking it to pay property tax and related levies. Officials said Foxconn had not responded to any of those notices, triggering tensions and public warnings by panchayat representatives.

The issue escalated into a wider controversy, drawing state-level attention amid concerns that local bodies issuing tax notices to a marquee foreign investor could send adverse signals to the investment community. The state government and the Karnataka Industrial Areas Development Board (KIADB) subsequently stepped in, clarifying that industrial units located within notified investment regions are governed by separate statutory mechanisms, and not by gram panchayats.

With the SIR notification now in place, officials said there is no scope for gram panchayats to issue further tax notices to Foxconn. Any applicable levies will be governed by the relevant industrial authority under state law.