Finnish mobile phone maker Nokia said on Friday tax authorities have dismissed its appeal against a Rs 2,080-crore income tax demand notice for five fiscal years starting 2006-07. The company said in a statement it is examining all options, including going to Delhi High Court.

“Nokia is disappointed by the decision of the Commissioner of Income-Tax (Appeals), and will now examine all options open to it. These include taking the case back to the Delhi High Court,” it said. The tax demand was issued on Nokia’s India unit on March 15. The notice issued by the Income Tax Department alleged tax evasion by Nokia on royalty payments made against the supply of software by the company’s parent firm. Royalty payments attract a 10 per cent tax deduction under the Tax Deducted at Source category.

“In addition to the legal action Nokia is taking in India, it is worth remembering that the Ministry of Finance in Finland has launched the Mutual Agreement Procedure with its counterpart in India under the bilateral Double Taxation Avoidance Agreement to reach a common understanding on the matter. Nokia will act quickly and decisively to protect its interests,” the company statement added.

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