During an earlier hearing, the I-T department had informed the high court that Nokia India’s tax liability is over Rs 6,500 crore. Thereafter, in its reply to Nokia’s plea, for unfreezing of its assets in India, the I-T department has said that Nokia India and Nokia Corporation owe it Rs 21,153 crore as total tax liability (existing and anticipated), including penalty during a seven-year period from 2006-2013. Also Read - Nokia C30 budget phone with 6,000mAh battery launched: Price in India, Jio offers, specs, and more
The amount payable by Nokia was arrived at by the I-T department on the basis that the mobile manufacturing firm does not discharge its TDS liability on royalty payments and is not entitled to any deduction under tax laws for operating from a special economic zone (SEZ). Also Read - Nokia XR20 launched in India at Rs 46,999: It is the toughest Nokia phone ever
In case TDS liability is paid and the deduction under tax laws for operating from a SEZ is available to Nokia, then its total tax liability (existing and anticipated), including penalty would be Rs 14,200 crore, the I-T department has said.
In its plea, Nokia said it intends to sell its assets in the country as part of the sale of its entire global mobile phone manufacturing business to software giant Microsoft but without the vacation of stay on sale of its assets, the deal is not possible.
The firm has also said Microsoft is interested in purchasing Nokia India’s assets only if relevant approvals have been obtained from the appropriate authorities. The issue relates to the IT department’s Rs 2,080 crore tax demand notice to the Finnish mobile firm.
The alleged tax evasion pertains to royalty payment made against supply of software by its parent company, which attracts a 10 per cent tax deduction under the Tax Deducted at Source (TDS) category.