The income tax department has issued a notice to Finnish mobile phone giant Nokia to pay Rs 2,058 crore for alleged tax-evasion.
The tax demand was issued on March 15 and the Finnish company received the order last week, a court document said. The court has asked the tax department to file its "counter-affidavit" in this case within one week, and the department will file the affidavit on April 10, income tax sources have told NDTV. (Read full story)
Nokia said on Thursday that tax officials had issued it a fine, but that the Delhi High Court had issued a stay on the demand. The phone-maker said in a statement, "Nokia reiterates its position is that it is in full compliance with local laws as well as the bilaterally negotiated tax treaty between the governments of India and Finland, and will defend itself vigorously."
The department's tax demand is "valid and legal" and backed by corroborative evidence which the court has taken cognizance of, the sources said. They said surveys had earlier been carried out at Nokia factories (in Chennai and Gurgaon).
The company had last month objected to tax officials entering its factory in Chennai, which is one of its biggest facilities. Nokia said it has invested over $330 million in Chennai since setting up the factory in 2006.
The tax demand comes as Asia's third-largest economy is aggressively pursuing tax claims against foreign companies as it seeks to rein in its budget deficit to avoid a credit rating downgrade.
Last month, a government official said tax authorities have accused Cadbury Plc, now part of U.S. snacks firm Mondelez International, of misleading them about production from a new factory to avoid about $46 million in taxes.
Royal Dutch Shell, Vodafone and LG Electronics are among numerous multinational firms involved in tax disputes in India, and have challenged the orders.
The lawyer for Nokia has assured the court that the company would not transfer or remit any funds outside India, except in the normal course of business, until the date of the next court hearing, the court document showed.
He told the court that the phone maker had no intention to evade any taxes in India, but would seek legal recourse to challenge the notice of tax demand.
Countries like India are crucial for Nokia's attempt to hold on to global market share. Last month, it announced an expansion of its Asha line of low-end smartphones and India is widely seen as a key market for such cheaper models.
With inputs from Reuters
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
