Nokia, TN govt spar in HC on tax demand

The handset maker says it has documents to prove it exported equipment

The legal tussle in the Nokia tax case continued today, with the handset maker rubbishing the claims of the TN government.

Nokia told the HC that it had documents to prove that it had exported the mobile handsets and not sold them domestically as claimed by the TN govt.

The state government had alleged, earlier this month, that Nokia had sold mobile phones meant for export in the domestic market. Hence, it said, the company owed dues on value added tax (VAT), for the financial years 2009-10, 2010-11 and 2011-12, which totalled to Rs 2,400 crore.

When asked if it will be willing to deposit part of the Rs 2400 crore tax demand into an escrow account as an interim measure, Nokia said it was facing financial problems and would not be able to comply.  

During the heated argument at the court, Nokia's senior counsel Arvind Datar said, "What the department is saying (on no export having taken place) is unimaginable." He said they had all the documents needed to show exports (of Rs 23,904 crore worth of equipment to a little over 30 countries, including 118,000 bills of landing, customs documents and so on. The data they were prepared to show included those from the Reserve Bank of India, he added.

Nokia is already fighting an alleged Rs 21,000-crore tax evasion notice with the central income tax department in various other courts, including the Supreme Court (SC). The SC on March 14 had ordered Nokia to give a Rs 3,500-crore guarantee before it transferred its Sriperumbudur unit to Microsoft. The order upheld a lower court verdict on the plant, the subject of a income tax dispute, and had been challenged by the Finnish company.