Comments
Nokia India, which is contesting a ₹2,400-crore sales tax claim by the Tamil Nadu Government, has informed the Madras High Court that it may not be able to deposit any money into an escrow account due to ‘financial hardship’.
Two weeks ago, the State Government slapped a ₹2,400-crore notice on the Finnish handset manufacturer saying that it was selling its products manufactured at its Sriperumbudur plant domestically, and this attracts local tax. Senior advocate Arvind P Datar, representing the telecom company, told the court that foreign exchange was coming in for many years and the factory is located within the Special Economic Zone. There have been audits done in the past to prove that export was taking place. Nokia will produce all documents next week to substantiate the company’s stand. .
The State Government’s demand is not sustainable. The notice was sent to Nokia without hearing the company’s side, Datar told the court, which was hearing a petition filed by Nokia challenging the tax notice.
Hearing adjournedWhen the matter came up before Justice B Rajendran, State Advocate General AL Somayaji opposed granting any interim order to Nokia. Under Section 27(4) of the Value Added Tax, there was no need to issue prior notice to the company, an issue being raised by the petitioner, he argued. Justice Rajendran wanted to know whether Nokia could pay a part of the amount to an escrow account, which Nokia said it could not. He adjourned the hearing to next week.
Nokia earlier in a statement said the Tamil Nadu tax department has moved to assess sales tax on the export of devices from the Chennai facility. 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.
The company is also involved in a ₹21,000-crore tax dispute with the Income Tax Department.
Nokia has invested over $300 million at the 210-acre plant in Sriperumbudur, which is located on the Chennai-Bangalore National Highways. With production of over 500 million units in seven years, this is the largest Nokia production facility. It employs 8,000 people, 50 per cent of whom are women.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.