India court seeks value of Nokia factory seized during tax dispute

 
City A.M. Reporter
AN INDIAN court has extended a hearing over local tax authorities’ seizure of a Nokia factory by seeking information on the plant value, adding to concerns whether the company can transfer the property to Microsoft as part of the sale of its mobile phone business.

Nokia has offered to pay a €270m (£227.3m) deposit to Indian authorities to unfreeze assets in a tax dispute, according to sources familiar with the matter. The Finnish firm has been trying to free up the assets, particularly its Chennai factory which is one of its biggest phone-making plants, ahead of the sale of its mobile phone business to Microsoft.

The Delhi High Court had asked the tax authorities to submit the value of the Chennai factory by yesterday amid growing uncertainty about Nokia’s exact tax liabilities in India. A lawyer for the tax department said Nokia owed 78bn rupees in tax payments.

The final sum of tax liabilities are not yet known. But in March, it was served with a tax demand of about 20.8bn rupees for five fiscal years starting from 2006-07, according to a March 22 notice on the Delhi High Court website.

Nokia said it had not been served with any claim beyond that amount. “In recent months we have seen and read about many claims from the tax authorities,” the company said in a statement. “We feel they are without merit and will defend ourselves vigorously in court.”