The Income-Tax department has served a Rs. 2,000-crore demand notice on Finnish cellphone giant Nokia for alleged evasion of taxes in its business transactions in the country, bringing into renewed focus tax tussles between Indian authorities and multinational corporations. Nokia has got a court stay against the notice.
In a case reminiscent of a controversial tax charge on UK-based telecom service provider Vodafone that reached the Supreme Court and shook investor confidence, the department on March 21 asked Nokia firm to submit the amount in about a week's time.
Income-tax department sources confirmed the notice. Challenging the notice, Nokia moved the Delhi High Court and after hearing the petition filed by the company, the court granted an interim stay on March 22, officials said.
While British mobile network firm Vodafone is fighting a multi-billion-dollar tax bill from tax authorities over its 2007 purchase of Indian stakes from HongKong-based Hutchison group, Royal Dutch Shell and Cadbury are among other companies tht are also involved in tax disputes.
"The tax evasion is related to the royalty payment made against supply of software by Nokia's parent company, which attracts a 10% tax deduction under the Tax Deducted at Source category," a department source said.
Nokia confirmed receiving the I-T notice. "Nokia filed a writ before the Delhi High Court last week, and on March 22, the court issued notice to the I-T department to file its counter affidavit and has granted interim stay of the entire tax demand raised against Nokia till further orders," Nokia said in an email to HT.