Nokia Wants Indian Authorities to Release Handset Factory Ahead of Microsoft Deal

Nokia has asked an Indian court to release one of its factories which have been seized by the tax authorities while they argue over a tax dispute.

Nokia told the Delhi High Court that the seizure of the assets while the tax issue is still being argued was unwarranted behaviour.

Nokia said it wanted the assets to be released by December 12. A second court hearing is due next week. The dispute is one of several that Nokia is facing in the country, over income tax payments, and taxation on software royalties.

The assets were seized in October, and Delhi’s High Court has since agreed to release Nokia Indian bank accounts, but its immovable assets, including its buildings and facilities in India, remain frozen by the authorities.

The seizure of the Chennai factory is not expected to affect the deal to sell it to Microsoft, as Nokia would simply continue to run the factory as a Microsoft contractor until the tax dispute is resolved.

However, Nokia did recently warn that India is becoming an undesirable market in which to operate handset assembly plants and it might consider moving them to China.

Nokia is one of many companies facing unexpected tax demands, and the recent changes in tax legislation, largely to overturn a tax victory by Vodafone have worried overseas investors.

The lack of legal certainty and the difficulty of getting a stable legal solution to disputes are often cited as the biggest worries. Source :cellular-news