Foxconn-gram panchayat standoff in Bengaluru Rural: KIADB steps in, asks firm to pay property tax to board

A property tax dispute has emerged between Foxconn, a large electronics manufacturing company, and local authorities in Karnataka. The issue centers around the company’s industrial facilities and the responsibilities for property tax payments within the notified industrial areas. On February 2, 2026, the Karnataka Industrial Areas Development Board issued a notice to Foxconn and other industrial units in the Devanahalli Special Investment Region. The notice demanded that these companies pay property tax to the KIADB, which states that it has the authority to assess and collect taxes in particular industrial zones. The KIADB emphasized that property tax for the current financial year 2025-26 must be paid to the board, while property tax arrears for the previous year, 2024-25, should be settled directly with the respective gram panchayats. Along with the tax notice, the Koira gram panchayat requested detailed information from Foxconn. They asked for documents such as approved building plans, construction licenses, completion certificates, occupancy certificates, and details on the built-up area for facilities in Doddagollahalli and Aruvanahalli villages. The total area under question covers about 5.33 lakh square meters. Local representatives and residents have expressed concerns regarding Foxconn’s compliance. They alleged that the company has not shared the required documentation nor provided employment opportunities for local youth despite repeated requests. These residents have warned that they might protest if their demands are not met. The gram panchayat issued a warning of possible legal action under the Karnataka Gram Swaraj and Panchayat Raj Act if Foxconn did not respond within seven days. This move indicates the seriousness of local authorities’ stance on the issue. The KIADB clarified that all entrepreneurs operating within the notified industrial areas are responsible for paying property tax for the current year. In addition, they communicated that a new online portal has been launched to facilitate property tax payments digitally. This portal allows industrial plot holders to assess and pay their taxes easily through a dedicated platform, supporting transparency and administrative efficiency. Foxconn's industrial activities in the region are significant, as they involve around 300 acres in the ITIR industrial area across Doddaballapura and Devanahalli taluks. The company has been setting up a mobile phone manufacturing facility in Devanahalli. According to the chief minister in a recent budget speech for 2025-26, Foxconn has started this project with a capital investment of nearly twenty-two billion rupees and is receiving incentives valued at about seven billion rupees under the Electronics System Design and Manufacturing scheme. The situation is complicated by a prior legal ruling. In July 2025, the Karnataka High Court decided that gram panchayats do not have the authority or jurisdiction to demand property tax from industrial establishments set up within industrial areas managed by the Karnataka Industrial Areas Development Board. This decision limited the local authorities' power to levy such taxes, although the dispute continues regarding specific cases and implementation. Back in 2024, the KIADB clarified that the compensation for land acquisition related to Foxconn’s 300-acre land in Kund was organized under a different framework, and the company’s investments are part of a broader industrial development plan within Karnataka. This ongoing issue highlights the complexities of tax policies and local governance in industrial zones. While the government and authorities emphasize their authority over tax collection in notified areas, legal rulings and local concerns add layers of complexity. The situation involving Foxconn exemplifies the challenges faced by large industrial projects in balancing regulatory compliance, local expectations, and legal frameworks. As the dispute unfolds, stakeholders continue to monitor developments closely. The resolution of this tax issue could have broader implications for how multinational companies operate within Karnataka’s industrial zones and how local authorities manage industrial growth and taxation policies.