The auto major, which wants to roll out the first Octavia model in June next year, has stressed the need for granting the `fall back position' of 200 per cent of the invested amount without any time period, as stipulated in various government resolutions on offering incentives for mega projects.The company is insisting upon the `fall back position' on the assumption that it may not be possible for it to invest Rs 750 crore or more in the seven-year period required under the mega project category.

Skoda has assured the government that it will refund any incentive facility availed in excess of the entitlement under the Package Scheme of Incentives.Skoda is prepared to repay the excess amount of incentives in one stroke, but without any interest.

According to government directives, excess incentives enjoyed need to be repaid in lumpsum with interest at 24 per cent as per the Sales Tax Act. At present, the interest charged is 22.5 per cent.

Mantralaya sources told The Financial Express that the state cabinet will have to take a final decision in this regard, as the company wants to sign a memorandum of understanding by end-December. The issue is likely to be taken up at the next meeting of the cabinet at Nagpur during the ensuing winter session.

Skoda India operations director Imran Hassan on Thursday held a three-hour meeting with government officials, and demanded that Skoda should have the option to cross over to any new scheme of incentives announced by the government. Such a changeover would have to be done in its entirety, as a package and partial appropriation of any such new scheme would not be permissible. The company will switch over to the new scheme within 12 months of its formal announcement. Meanwhile, the Maharashtra Industrial Development Corporation has earmarked the 100 hectares of land sought by Skoda at Shendre. The land would be sold at a modest rate of Rs 50 per square metre.