If Nokia were to pay taxes that the Indian tax authorities are asking for, more than half of the money it made from its sale to Microsoft would go to the Indian exchequer.
Nokia India and Nokia Corporation owes Rs 21,153 (~$3.5 bn) crore as tax liability including penalty during a seven-year period from 2006-2013, according to a claim made by the Income Tax department to the Delhi High court.
The department has arrived at the payable figure on the basis that Nokia does not discharge its TDS liability on royalty payments and is not entitled to any deduction under tax laws for operating from a special economic zone (SEZ), a TOI report said.
Earlier, Nokia had pleaded to the court that its accounts must be unfrozen for it to complete the $7.2 bn Microsoft deal. In October, the Delhi High Court ruled in Nokia’s favor in a case where the Indian tax authorities froze some of Nokia’s assets.
Last month the Nokia tax dispute looked like it was closing to a settlement with the Finnish phone-maker willing to pay the Indian government Rs 2,250 cr (~$360 mn) in taxes as soon as it completes the Microsoft deal. This offer was recently turned down by the I-T department during the proceedings before the high court.