'Nokia changing accounting, business model
to avoid taxes'
Wednesday January 09, 2013 08:07:42 PM,
IANS
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Chennai:
The Income Tax department Wednesday said the Indian subsidiary of
Finnish mobile handset-maker Nokia has changed its accounting
model and is reorganising its existing business model to avoid
direct and indirect taxes.
"It is observed that the company has changed its accounting model
and also it is in the process of reorganising the existing
business model to bypass certain direct and indirect tax
liabilities," the department said in a statement after its
"survey" of Nokia's corporate office in Haryana and factory at
Sriperumbudur, near here.
According to the department, some more clarifications have been
sought from Nokia and the evidence gathered needs further
investigation before a final decision is reached on the company's
tax liabilities.
A team from the tax evasion detection wing of IT department
Tuesday began a "survey" at the premises of Finnish handset-maker
Nokia's Indian subsidiary which ended Wednesday morning.
In IT parlance, "search" and "survey" are different terms.
In a search operation, the business and residential premises are
searched and the officials have the power to seize documents.
However, a survey is done only in the business premises when there
is a suspicion of tax evasion.
IT officials are confident that prima facie there is a strong case
against Nokia for evading tax to the tune of around Rs.2,500
crore.
"We have a prima facie case against Nokia's Indian subsidiary. For
the past six years the company has paid around Rs.20,000
crore-Rs.25,000 crore as royalty to its Finnish parent without
deducting tax at source," a senior official in the investigative
wing of the IT department told IANS.
According to the department, Nokia India has been downloading
software from its parent company to make the handsets here.
Nokia's Indian plant near here makes over 20 different models and
is one of its largest global facilities involving an outlay of
around $300 million.
IT officials said Nokia executives had been asked to come Jan 16
for further clarifications.
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