Finnish mobile phone makers, Nokia have been fined a staggering 20.8 billion rupees ($383 million) by the Indian tax officials for not paying taxes. However, the company has managed to get a stay on demand from the the Delhi High Court.
Given that the company is already experiencing drop in sales, the tax order, if enforced, can exert pressure on the Nokia's finances.
"Nokia reiterates its position is that it is in full compliance with local laws as well as the bilaterally negotiated tax treaty between the governments of India and Finland and will defend itself vigorously," said the company in a statement.
The order from the Indian tax officials, is a result of the Indian government's efforts to generate revenue in the face of slowing economy.
Reuters reports that, Nokia said, it filed a write-up before the Delhi High Court, petitioning against the order. the court has asked the tax department to present a "counter-affidavit" within a week
Nokia's manufacturing facility in Chennai was raided by Income Tax officials. Nokia filed a letter of objection against the raid. The company said the actions of the Income Tax authorities in Chennai are excessive, unacceptable and inconsistent with Indian standards of fair play and governance.
Indian Market has been crucial for Nokia, especially because the low-end smartphones from the Asha series are doing well in the country.
Amidst the tax controversies, D Shivakumar, Vice President of Nokia has resigned from the company. Prior to the VP role Shivakumar, was heading Nokia's India operations. He made a shift to the global role in December 2011. He will be resigning after a 8 year long stand in the company.
Shivakumar told Economic Times that he will be headed back to India after the June quarter, but did not comment on what his future plans were. Admist controversies