Nokia India in trouble again! Income Tax department slaps fresh tax notice against it

There is a bad news for Nokia India. Income Tax department has slapped fresh tax notice on the firm, which wants the fresh demand to be included in the ongoing negotiations between India and Finland to resolve the Rs 2,000-crore tax dispute which was imposed earlier.

According to a senior Finance Ministry official, the fresh tax demands notice was served to Nokia India for dispute relating to other assessment years, apart from the one being contested currently in ITAT.

However, there is no information about the demand raised or the action that the IT department has proposed.

In 2003, the department had slapped a tax notice of Rs 2,000 crore on Nokia's Indian subsidiary for violating the withholding tax norms since 2006 while making royalty payments to the parent company in Finland.

Nokia's mobile unit has now been sold off to Microsoft, but the Chennai factory, which is involved in the tax dispute was not included in the deal.

The company wants the notices to be included in the ongoing discussions under the Mutual Agreement Procedure (MAP), said the official, adding senior officials from India and Finland would meet soon to decide on the course of action.

After being asked about the notice served to the telecom company, it said: "Nokia has indeed received a claim from the tax authorities - it is largely about the same dispute as earlier, so we have nothing to add."

The government has been emphasising on early resolution of pending tax disputes with a view to make the tax regime more predictable and investor friendly.

Meanwhile, MAP is an alternative available to taxpayers for resolving disputes involving double taxation. However, there is no time frame for resolving cases under MAP negotiations.

(Image: Indiatimes)