On Friday, Nokia announced it had received a $414 million sales tax claim from an Indian state.
According to Reuters, Nokia received the tax bill from the sales tax department of Tamil Nadu state over sale of the phones manufactured in the state's capital, Chennai. Nokia protested the claim, indicating it may have been made on grounds that the phones were made for sale in India and not for export. Indian laws exempt tax on export products, Reuters added.
The Economic Times reported Nokia has filed a writ in the High Court of Tamil Nadu contesting the claim. "Nokia considers the claim to be completely without merit and counter to domestic tax laws," the company said in a statement. The case is expected to be heard by the court next week.
Telecom Lead reported the company had contested the claim saying, "This allegation has no basis in reality whatsoever; it could easily be rebuffed by a check of documentation provided to various governmental departments including Customs."
The Supreme Court of India last week ordered Nokia to furnish 35 billion Indian rupees ($571 million) guarantee in a tax dispute, prior to the Chennai unit's transfer to Microsoft, according to Reuters.
Nokia stated that the buyout is likely to be concluded by month end, reported Reuters. The report also said the company was weighing various courses of actions after the Supreme Court's ruling on to the Chennai plant, which is one of its biggest manufacturing units.
"Nokia's disputes follow several high-profile tax cases involving foreign companies in India. Vodafone Group, IBM and Royal Dutch Shell are among foreign groups contesting local tax claims," Reuters said.
