The Income-Tax Department has served a more than Rs.2,000-crore demand notice on Finnish mobile maker Nokia for alleged evasion of taxes in its business transactions in the country.
The department had on March 15 asked the firm to submit the tax demand of over Rs.2,000 crore, which has been temporarily stayed by the Delhi High court in view of an appeal filed by the firm regarding the time period set by the department to furnish the stated tax demand, I-T Department sources said.
Nokia confirmed receiving the notice and said it was in ‘full compliance’ with laws related to its business operations.
“Nokia confirms it has received an order from Indian tax officials. Nokia reiterates its position 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 company said.
“In this regard, Nokia filed a writ before the Delhi High Court last week and on March 22, 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 Nokia spokesperson said in a statement to PTI.
The I-T Department would file its reply on or before April 10 in the Delhi High Court, stating that it had issued the notices under sections that “enable and authorise” it to issue such a time-bound notice, department sources said.
The seven notices, from financial year 2006 to 2012, have stipulated a varied time period of five days to a month to ensure that the “interest of revenue” is upheld in this case.
The notice has been issued by the I-T Department after it completed its probe and had conducted a ‘survey’ operation on the premises of the Chennai in January this year.
The tax evasion, according to I-T department sources, pertains to royalty payment made against supply of software by the compamy’s parent company, which attracts a 10 per cent tax deduction under the Tax Deducted at Source (TDS) category.
During the hearing of Nokia’s appeal in the Delhi High Court, the department had called this case as that of a “contumacious default” that had been in place since January 2006 by Nokia India Private Limited (NIPL).
“If allowed more time Ms NIPL will assuredly explore legal options to delay and obstruct recovery. It is also feared that the tax avoidance scheme may be put in place to avoid payment of due tax...,” the I-T Department had contended.
The court order also stated that Nokia had assured that it “shall not be transferring/remitting any funds outside India except in the normal course of business till the next date of hearing.” —PTI