Nokia will have to clear Rs 6,500 crore tax liability: Finance Ministry

NEW DELHI: Unfazed by threats of closure of Nokia's Chennai plant, a top Finance Ministry official today asserted that the Finnish company, which is being acquired by Microsoft, will have to clear a total tax liability estimated at around Rs 6,500 crore.

"Nokia will have to pay total tax liability," the senior official said when asked to respond to the recent statement of Finland's Foreign Minister Erkki Tuomioja.

Tuomioja had told a group of visiting Indian journalists last week that failure to resolve Nokia tax case before December 12 could lead to closing down of the Chennai plant which directly and indirectly employs 30,000 people in India.

"There is an agreement between Nokia and Microsoft that unless this dispute is solved and the assets of its Chennai plant unfreezed before December 12, the Chennai plant would be left outside of Nokia-Microsoft agreement.

"That of course, in the worst case, could lead to closing down of the Chennai plant, which is employing many thousand people, and with sub contractors up to 30,000 people. So, I think that would not be (in) anyone's interest," he had said.

The Income Tax Department had slapped a notice on Nokia's Indian subsidiary for violating withholding tax norms since 2006 while making royalty payments to its parent company in Finland.