Nokia appeals to court after Income Tax slaps Rs 2,000 crore notice

Chennai:

Nokia on Thursday confirmed that the Income Tax department has served Rs 2,000 crore notice on the Finnish mobile maker for alleged evasion of taxes in its business transactions in the country and reiterated that it is in full compliance with local laws as well as the bilaterally negotiated tax treaty between the governments of India and Finland.

In a statement, Nokia said that it will defend itself vigorously and has filed a writ before the Delhi High Court last week. “On Friday, the Court has issued notice to the income tax department to file its counter affidavit and has granted interim stay of the entire tax demand raised against Nokia till further orders,” a statement from Nokia said.

Since establishing the Chennai factory in 2006, indeed since starting business operations in India in the mid-1990s, Nokia has been scrutinized by the authorities regularly, and its policies have been validated by the Indian and Finnish Tax authorities in the normal course of tax proceedings, the statement added.

Nokia arrived in India 18 years ago and has grown to become a market leader, contributing to the rapid growth of the Indian economy. Nokia has invested over $330 million in Chennai since setting up the factory. The Indian people, in turn, have shown their trust in us, recently voting Nokia the top trusted brand in the country, the statement added.

 “Nokia remains willing to cooperate fully with Indian tax authorities in accordance with all applicable laws. Nokia has enjoyed a long and fruitful relationship with India, and looks  forward to a prompt and just resolution to this matter,” it added.

This comes in the wake of Income Tax department in Chennai quizzed Nokia India officials over tax irregularities following an I-T survey conducted at the factory and corporate premises in Chennai and Gurgaon in Haryana respectively. The tax evasion pertains to royalty payment made against supply of software by the company's parent company which attracts a 10 per cent tax deduction under the Tax Deducted at Source (TDS) category.