Karnataka Industrial Body Clarifies Tax Authority After Foxconn Notice

Amid an escalating dispute involving global electronics major Foxconn and the local Koyira Gram Panchayat, the Karnataka Industrial Areas Development Board (KIADB) has asserted that it is the sole authorized body responsible for collecting property tax from industrial establishments functioning within the Devanahalli Special Investment Region (SIR).

The clarification comes after the Gram Panchayat lodged a formal complaint accusing Foxconn of failing to pay local property taxes, violating building regulations, and not adequately hiring residents from nearby villages. The Panchayat had also issued a seven-day ultimatum to the company, warning of legal action and a large-scale protest if its demands were not addressed.

In an official statement, KIADB stated that it holds the statutory authority to directly levy and collect property tax from industrial units located in Adinarayanahosahalli Phase II and Devanahalli General Industrial Area Phases I and II. These areas, covering a total of 317.89 acres, were formally notified as part of the Devanahalli Special Investment Region through a government notification issued on January 29, 2026.

The Board further clarified that all industrial entities operating within these designated zones are required to pay property tax to KIADB starting from the 2025–26 financial year. As per government norms, the revenue collected will subsequently be transferred to the concerned local bodies. KIADB also emphasized that the land on which these industrial units operate does not fall under the ownership or jurisdiction of the Gram Panchayat.

Responding to the controversy, Karnataka Minister for Large and Medium Industries M B Patil sought to downplay the issue, stating that there was “no confusion” regarding tax jurisdiction. “We checked it yesterday. This is a very minor problem,” the minister said, indicating that the matter was being unnecessarily escalated.

Patil also rejected allegations that Foxconn had failed to employ local residents, describing such claims as “false and not true.” He noted that the company had recruited nearly 5,000 workers, many of them women, through organized job fairs. “Recruitment is based on skill requirements,” he added, underscoring that employment decisions were aligned with operational needs.

Officials believe that the KIADB’s clarification will help de-escalate tensions between the Panchayat, local residents, and the industrial establishment. The move is also expected to bring greater clarity on tax jurisdiction and regulatory compliance within the newly notified Special Investment Region, reassuring investors while addressing governance concerns at the local level.