IT Ministry hopes Budget will resolve tax dispute over Nokia’s Chennai plant

S Ronendra Singh New Delhi | Updated on February 19, 2015 Published on February 19, 2015


Writes to FinMin suggesting measures to revive unit

Nokia’s mobile phone manufacturing plant could get some relief in the upcoming Budget. The plant, which at one point employed close to 8,000 people, is now lying idle for last many months after the tax authorities imposed a freeze on Nokia’s asset due to a tax dispute.

According to multiple sources, the Department of Electronics and Information Technology (DeitY) has written to Finance Minister Arun Jaitley, suggesting measures to revive the plant.

“There are some solutions we have suggested and we expect the Finance Minister to look into them and announce in the forthcoming Budget,” a senior government official told BusinessLine. The Department has suggested to resolve the tax issue legally but at the same time revoke the freeze on the plant so that the machinery can be put to use. Another official said the Centre should work towards a resolution that would better the sentiments for electronic manufacturing in India.

‘Make in India’ campaign

As part of the Prime Minister Narendra Modi’s ‘Make in India’ campaign, Ravi Shankar Prasad, Minister of Communications and IT, has been also saying his Ministry would work on all possibilities to help grow electronic manufacturing in the country.

The Nokia plant, which had suspended manufacturing in November, had shifted its production to its overseas plants as it ran into trouble with tax authorities and legal.

The plant could not become part of the Microsoft deal which bought the Finnish company’s handset business for $7.5 billion last year. In a recent interview with BusinessLine, Nokia’s CEO Rajeev Suri said that there was a lot of interest from potential buyers if the freeze order was revoked.

Published on February 19, 2015
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