Nokia files writ petition against Tamil Nadu govt.’s Rs 2,400cr tax demand

Nokia files writ petition against Tamil Nadu govt.’s Rs 2,400cr tax demand

Nokia India on Friday refuted Tamil Nadu government's allegation that the handset maker avoided taxes on handsets sold domestically by masking them as exports.

Filing a writ petition with the Madras High Court, Nokia India revealed that Tamil Nadu's income tax department had asked it to pay Rs 2,400 crore in tax, claiming that that handsets manufactured by the company in Chennai were not exported and were instead sold in the domestic market.

Denying any wrongdoing, Nokia India said in a statement, "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."

The company also stressed that the allegation had no basis, and that it would defend itself vigorously in the matter. It also claimed that documentation provided by it to different governmental departments including Customs could easily rebuff the allegation.

The Rs 2,400-crore tax claim from the Tamil Nadu government is a bolt from the blue for Nokia India, which is already battling a tax claim of Rs 21,000 crore from the side of IT department over royalty payments it made to its parent firm in Finland.

Around a week ago, the Supreme Court of Indian upheld the Delhi HC's verdict ordering the company to provide Rs 3,500 crore as guarantee against its future tax liabilities to get its Chennai plant freed, which is necessary for transfer of the plant to Microsoft. The handset maker has already warned that it could shut down the plant, which provides direct & indirect employment to more than 7,000 people, in case it is not transferred to Microsoft.

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