Cannot pay sales tax to TN, Nokia tells Court

Nokia India on Tuesday maintained its earlier stance that it cannot pay any sales tax to the Tamil Nadu Government, which has demanded ₹2,400 crore as Value Added Tax from the handset manufacturer.

The State Government has said that the handsets manufactured at the company’s Sriperumbudur plant were also sold in India.

“It is an unreasonable demand from the Tamil Nadu Government,” the company’s counsel told the Madras High Court today.

‘Liquidity pressure’ There is no cash with the company, which paid ₹782 crore as tax to the Income Tax Department, Nokia’s counsel Arvind Datar told the Court. “Nokia is robust and strong but is facing liquidity pressure,” he said.

The court was hearing a writ petition filed by Nokia to contest the tax claim of the State Government. Justice B Rajendran has posted the case for next week.

The Court wanted to know whether Nokia can deposit 5 per cent of the claim in an escrow account. However, Nokia said the company does not have the amount, which works out to ₹120 crore.

In the last hearing, Datar said Nokia can produce documents to prove equipment worth ₹23,904 crore was exported to nearly 30 countries. The documents include nearly 118,000 bills of lading and those submitted with the Customs department.

The Finnish telecom major is involved in a ₹21,000-crore income-tax dispute with the Income Tax Department over royalty payments to its parent company in Finland.