Tamil Nadu slaps Rs 2,400-cr tax notice on Nokia

Company says claim counter to facts, domestic tax laws, goes to high court

Finnish mobile handset maker Nokia now faces another tax dispute. The Tamil Nadu government’s sales tax department has sent it a Rs 2,400-crore notice for alleged non-payment for value added tax (VAT).

The company says the basis for doing so is absurd and it has gone to the high court here. The state governnment alleges Nokia has been selling whatever was produced from its Sriperumbudur facility, around 40 km from here, in the domestic market without any export. The notice says the company has to pay VAT for the years 2009-10, 2010-11 and 2011-12.

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).

To Business Standard, the company said: “Nokia considers the claim to be completely without merit and counter to domestic tax laws. In India, exports are by law exempt from tax, and Nokia has proved consistently that devices produced at Chennai are exported abroad. Indeed, the company has been regularly assessed and audited by the tax authorities since 2006 without incident, and it has also won numerous export awards from governmental organisations”. Nokia’s facility recently crossed the 800-million mark.

The company further said, “It is absurd that the Tamil Nadu tax authority is now claiming that devices made in Chennai were not exported and were instead sold domestically in India. We contend that this allegation has no basis in reality whatsoever; it could easily be rebuffed by a check of documentation provided to various governmental departments, including Customs. Nokia will defend itself vigorously in this matter”.

The new set of troubles for Nokia comes when it is fighting hard to settle the issue of the alleged Rs 21,000-crore income tax evasion. 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.
ANOTHER TAX DISPUTE

• The Tamil Nadu govt says Nokia has been selling products from Sriperumbudur facility in the domestic market without any export
• Nokia says exports are by law exempt from tax and it has proved consistently devices produced were exported
• Nokia is already fighting an alleged Rs  21,000-crore tax evasion notice with the central income tax department