December 10, 2013 / 10:18 IST
In the latest from the Nokia’s tax tussle, the company had offered to deposit Rs 2,250 crore, if the income tax (I-T) department agreed to detach its Chennai factory, but the government has rejected Nokia's offer, reports CNBC-TV18’s Aakansha Sethi quoting finance ministry sources.
Also Read: Tax demands to Nokia may cross Rs 10,000 croreThe finance ministry and the I-T department have made it very clear that they are not opposed to the deal, but will safeguard their tax interest and Nokia will have to pay Rs 12600 crore. This payment can be in hard cash or as a bank guarantee or a guarantee of any other sort, but there has to be a guarantee that the company will pay this amount.Earlier, Nokia had made an offer saying that after the sale consideration, it would deposit the money in an account on which the I-T department would have primary claims. However, the I-T department says that once Nokia has exited the country, it will be difficult for them to get that tax liability from the government.Remember, Rs 2600 crore is the company’s tax liability for the current year and Rs 10,000 crore is the prospective liability for the next year and a half. It is being levied on Nokia because the company is going to exit the country. Also, remember that the Finnish government is trying to ask for a renegotiation of the Double Taxation Avoidance Agreements (DTAA) because it believes that there is a difference in calculation of the tax amount. It also remains to be seen if there will be a stay that the Delhi High Court will give in that case. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
