SC asks Nokia to Evaluate Chennai Assets

The apex court to hear the case on Friday

nokia-tax-caseThe Supreme Court on Thursday asked Nokia to come with the valuation of its India assets for the next hearing. The apex court was hearing the Nokia tax dispute today and postponing the hearing to Friday, the apex court has asked Nokia to furnish the valuation of its Chennai assets so that it can come to an amicable conclusion.

The Indian tax authorities demand there is a tax liability of at least Rs 10,000 crore on the Finnish company and a bank guarantee by Nokia can only solve the purpose.

The Supreme Court, on today’s hearing said, it want to make sure that there is sufficient fund left to take care of the interests of the income tax department even after the assets transfer to Microsoft who bought Nokia in over a Rs 30,000 crore deal.

Earlier the Indian tax authorities have moved the Supreme Court seeking attachment of the assets of the handset maker for which the hearing was going on today.

Before this, the Indian arm of the Finnish handset maker had approached the apex court against the Delhi High Court order where the court had said Nokia has to furnish guarantee letter from its parent company. However, the company had approached the apex court against this verdict saying the company should not have to submit a guarantee from its parent company.

When contacted a Nokia India spokesperson said it would approach the Supreme Court with the valuation.

“The case will be heard again tomorrow and we will go with the valuation of our Chennai assets,” the Nokia spokesperson said.

The case is related to Nokia’s tax liabilities in the wake of the Finnish company’s asset transfer to Microsoft after the latter acquired the handset maker.

The High Court had said that the asset transfer will be allowed only after fulfilling of two conditions. One, submission of a bank guarantee by Nokia and two, furnishing of a letter of guarantees by its parent company in Finland.

After Nokia India approached the Supreme Court against the High Court verdict, the tax department has sought the apex court’s intervention in attachment of the mobile phone maker’s India assets.

The tax department is now saying that Nokia has to fulfill six conditions to allow the transfer of assets.  Among the six conditions, the major demands  include deposition of around Rs 3862 crore for the present tax liabilities including interest, Rs 5000 crore should be deposited by Nokia in an escrow account and another Rs 3500 crore, which were paid by Nokia India by way of dividend to Nokia Finland should be brought back into the country.

 

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