Income Tax authorities are hopeful of recovering a huge sum of money from Nokia India for its alleged tax evasion, which might run into crore of rupees, according to an investigating officer.
Currently, the office of Director General of Income Tax (Investigation), Chennai, is trying to wrap up the probe, and find out the tax liability arising out of non-payment of Tax Deducted at Source (TDS) on software supplies to Nokia’s parent company in Finland.
Talking to The Hindu, a senior official said on Thursday that “the catch will be more than Rs.1,600 crore for the last six years. It will also attract a penal interest of 12 per cent per annum. Given the current fluctuation in the US dollar against Indian rupee, it could be easily in the region of Rs.2,500 crore to Rs.3,000 crore, including the penal interest. As all the payments are made in US dollars, we are yet to fix a particular rate to quantify the exact tax liability.”
About 20 officials carried out the search under section 133A of the Income Tax act at the Nokia India Sriperumbudur factory and Gurgaon Corporate office premises on Tuesday.
“We have caught them at the right moment, and there is no chance of losing even a single pie. If the probe were to be for ten years, definitely we had very less chance of recovering the tax dues for the first four years. Fortunately, Nokia Chennai plant was set up during 2006-07. Right now, we are studying the books to arrive at the tax liability year-wise, and thereafter we will apply the interest rate. The company also tried to change its accounting model to by-pass certain direct and indirect tax liabilities. But, now it is too late,” the official said.
Nokia India executives visited the IT office on Thursday and they are likely to appear before the officials for the next couple of days to clarify the doubts. In a press release two days ago, the company had said it was cooperating with the tax investigation and added that it always observed applicable laws and rules in the countries where they operated. The probe is expected to be completed by next week.
Keywords: Nokia IT raid