Nokia’s Rs 2,250 crore offer to Indian government rejected, Chennai plant in a limbo ahead of Microsoft acquisition

The ongoing tax dispute between Nokia and the Income Tax department in India has taken a new twist. Last month, Nokia offered to pay a minimum of Rs 2,250 crore as tax, but at a scheduled hearing in the Delhi High Court, the IT department has deemed it unacceptable, The Economic Times reports.

At the hearing in the Delhi High Court, the judges labeled what Nokia has offered as “nothing.” The judges also questioned the company’s decision to send Rs 3,500 crore to Finland as dividend for 18 years and asked why that amount was not paid to the IT department instead.

Earlier, the Finnish company had promised to pay the entire tax amount as soon as the $7.2 billion deal with Microsoft is completed. Nokia also added that the amount of Rs 2,250 crore could go up depending upon the final sale price. In return, the company had again asked the court to consider unfreezing its Chennai factory to help the acquisition go through smoothly.

Nokia, another report claims, is now concerned that it might end up having to close the Chennai plant as it doesn’t see the tax dispute being resolved before December 12. “In the worst case [if the dispute is not resolved], it could lead to the closing down of the Chennai plant, which is employing 8,000 people, and with sub-contractors up to 30,000 people,” Finland’s Foreign Minister Erkki Tuomioja told ET.