Nokia to TN govt: Withdraw notice, have not evaded tax

The Indian Cellular Association (ICA), apex body of the mobile telecom industry, says it supports the stand of Finnish telecom major Nokia on the Rs 2,400 crore (Rs 24 billion) tax-dues notice it got from the Tamil Nadu government last week.  

Nokia has said the notice is based on unfactual reasoning. It has petitioned the high court in the state.  

In a telegram to state Chief Minister J Jayalalithaa, ICA's national president Pankaj Mohindroo has said: “The reputation of Tamil Nadu as a well- governed state is under attack.

We are sorry to point out that some officers of your government in the VAT (value added tax) department seem to have taken some unwarranted actions.

They have issued demands of huge VAT and hundreds of crores in export cases. This is unconstitutional and total violation of the due process of law.”  

The notice has been levied on production from Nokia’s unit at Sriperumbudur, meant for export. ICA has said exports do not attract VAT anywhere in the world, including India.

Especially so in a Special Economic Zone, where the entire production is to be exported under a customs bond. Exports are under the central government, while local sales are with the state VAT department.  

The tax notice says the output from Sriperumbudur was being sold for years in the domestic market, instead of being exported, a charge Nokia has ci contended is verifiable as absurd. ICA agrees, saying the state action is “total violation of due process, without examination of export records which are available with statutory bodies and without a showcause notice..”  

Urging the government to withdraw the notice, ICA has said: "The consequences of these will recoil on your government and leave you open to charges of lawlessness. The impression of good governance in Tamil Nadu will be sullied.”  

Nokia is already fighting an alleged Rs 21,000-crore (Rs 210 billion) tax evasion case with the (Centre’s) income tax Department in various courts in Delhi, including the Supreme Court.

The TN notice, signed by an additional officer from the sales tax department, says the company has to pay for the years 2009-10, 2010-11 and 2011-12.  

Separately, in the labour dispute between company and management at the Sriperumbudur facility, the union leaders are to meet the state labour commissioner on Monday.

The decision followed a meeting of the workers to discuss a recent Supreme Court order that said Nokia had to provide a Rs 3,500-crore (Rs 35 billion) guarantee before transferring the factory to Microsoft.