If you follow Nokia, you would know that one of the company’s factories in the Indian sub continent was raided by the country’s income tax department just about a month ago. And the tax authorities seem to have the found out a lot in that raid, and they have slapped an order at the Finnish smart phone manufacturer’s face for a back tax of 20.8 billion Rupees, which translates to $383 million. That is a big amount for the company considering its financial status and the sales figures of the company’s products.
On March 15th, the tax demand was ordered, which is around one month after the raid on the company’s factory. What does all this mean? It just means that the company had evaded tax returns in the years that have gone, and the tax authorities caught the company for this. Now the Indian government has ordered the company to pay so much.
But the company has already got a stay sanctioned against this, which means that the company will not have to pay the money right away, that order has to stay till another order has been passed by the local courts. The company will probably appeal the demand, which is just the reason for the stay. Nokia responded to Reuters’ request for comment with a statement that “it is in full compliance with local laws as well as the bilaterally negotiated tax treaty between the governments of India and Finland.” The firm said it will “defend itself vigorously.”
India is the top two market for the company after China, which is purely because the company has had a good market share in the country due to all the budget feature phones it has to offer. And the Lumia series of smart phones has started to gain some momentum in the country. And even though the revenue of the company fell by one fourth last year in the country, it would not want to lose the market.