Nokia cajoles Indian Government to settle Rs 20,000-crore tax dispute amicably

Expressing a desire to solve the ongoing tax dispute with the government in a friendly manner, telecom equipment maker Nokia said it would like to exhaust other options first than arbitration.

Nokia is in Rs 20,000 crore-odd tax dispute after authorities froze its assets in India and prevented transfer of its Chennai handset manufacturing plant to Microsoft, which acquired its devices business globally last year.

The Finnish firm, Nokia, sent India an arbitration notice, while highlighting the tax case could create negative sentiment among foreign investors, who have cited cases involving Nokia, Vodafone and Cairn, among others, to view India with suspicion when it comes to policy certainty and clear tax laws.

"There are better ways to resolve those (tax) issues (than arbitration) and we would like to exhaust those options first," Barry French, executive vice president of marketing and corporate affairs at Nokia, told Economic Times in an exclusive interview. He told the financial daily that India was "incredibly important" and would remain so after the 150-year-old company completes its acquisition of Alcatel-Lucent.

Nokia will try to settle through the ongoing legal process or mutual agreement procedure under a double taxation avoidance agreement with Finland.

In April 2015, Nokia had sought Prime Minister Narendra Modi's intervention to get the asset freeze on its factory lifted.

"We have seen the right desire to resolve the issues," French told ET.

Meanwhile, Nokia also laid emphasis on India's potential as a manufacturing hub, saying the dispute aside, it has had a fruitful experience in the country and other multinationals should set up shop to reap the benefits.

"Our overall experience in India, setting aside taxation issues, in terms of the quality of people, the infrastructure, has been very good. We would encourage every company to come and manufacture here," French told the financial daily, adding, “to those who don't because maybe they are nervous about India, because they don't understand India, we will say you should take the plunge and come here."

(Image: Reuters)