The Congress-Nationalist Congress Party (NCP) government in Maharashtra, scheduled to go for Assembly elections later this year, has created a special category of 'ultra mega projects' with investments of more than Rs 1,500 crore. These projects will be able to make VAT set-off claims on the basis of gross sales, and not net sales.

To avail of the benefits, top automobile companies - Tata Motors, Mahindra & Mahindra, Volkswagen and Bajaj Auto - have announced investments totalling Rs 11,510 crore in the state. These companies had threatened to leave Maharashtra and invest in other states when the state government had brought amendments to the Maharashtra VAT Act with effect from April 1, 2011, and made net sales the basis for VAT set-off claims.