IT department asks Nokia to explain payments to parent firm

The Director-General of Income Tax (Investigation), Chennai, has sought further clarification from Nokia India officials to ascertain the tax liabilities with regard to non-payment of tax deducted at source (TDS) on software supplies since 2005 and also a change in accounting model.

An official release issued on Wednesday said a survey was carried out on Tuesday at Nokia India factory, Sriperumbudur, and corporate office premises, Gurgaon, under Section 133A of the Income-tax Act, 1961, in which certain issues were identified and some important evidences that had a bearing on the tax implications of the company were impounded.

“Prima facie, there appears to be some defaults with respect to TDS deductions on royalty payments made to its parent company based at Finland. It is also observed that the company has changed its accounting model and also it is in the process of re-organising the existing business model to by-pass certain direct and indirect tax liabilities,” the release said.

According to the investigating officers, it was gleaned that Nokia India was making remittances to its Finnish parent company Nokia OYJ as payments for software supplies since 2005.

The above payments for software attracted TDS as per the provisions of the IT Act. But, it was learnt the assesssee company failed to make any TDS on the above payment.

To gather the evidence, a survey was carried out.

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Printable version | Jul 5, 2022 2:28:00 am |