Income-Tax department has informed the Delhi High Court 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.
 
The amount payable by Nokia has been 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).
 
The submission has been made by the I-T department in its reply to Nokia's plea for unfreezing of its assets in India prior to its $7.2 billion deal with Microsoft.

We have not been served with any official claim, so we cannot comment on this, Pooja Kaul said.  We want to stress that our main focus right now is to remove the freeze on our Indian assets, including Chennai, before the deadline of December 12. This is a separate matter from the broader tax dispute, said.
 
In recent months we have seen and read about many claims from the tax authorities. We feel they are without merit and will defend ourselves vigorously in court.
 
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.
 
Meanwhile, a bench of justices Sanjiv Khanna and Sanjeev Sachdeva adjourned the hearing on Nokia's plea to tomorrow when the company may have to answer the court's queries regarding the total investment made by it in India, dividend paid by it, quantum of purchases of raw materials, whether Nokia Corporation has been filing returns here, what will happen to Nokia Corp post-Microsoft deal, etc.
 
Nokia's offer to pay a minimum of Rs 2,250 crore, which could increase depending upon the outcome of its deal with Microsoft, was recently turned down by the I-T department during the proceedings before the high court.
 
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.
 
Nokia had made the offer seeking to get its assets here, including its mobile manufacturing unit in Chennai, unfrozen.
 
It has sought lifting of the stay on transfer of its assets in India saying the high court's injunction will jeopardise the sale of its Indian arm to Microsoft under the global deal.

Source: Business Standards