In January, the Income Tax department which 'surveyed' Nokia's books of accounts said that the telecom maker defaulted on some tax payments. Tax authorities also claimed that Nokia changed its accounting model to bypass tax liabilities.
Nokia has been making remittances to its Finnish parent company Nokia OYJ as payments for its software supplies since 2005. The payment for software supplies would attract TDS as per the provisions of the Income Tax Act 1961.
"But it is learnt that the assessee company has not made any TDS on the above software payments. During the course of survey operation at the factory premises, certain issues have been identified - some important evidence having a bearing on the tax implications of the company have been impounded prima facie. There appear to be some defaults with respect to TDS on royalty payments made to its parent company based at Finland," the department said in a statement.
It is also observed that the company changed its accounting model and is in the process of re-organising the existing business model to bypass certain direct and indirect tax liabilities. The department 'surveyed' the factory and offices of the Finnish company's Indian subsidiary (factory in Sriperumbudur and its offices in Gurgaon, Haryana).
(Agencies)
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