Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s factory in Chennai has been raided by Indian Income Tax officials today. The raid was fuelled by a suspicion that the Finnish Handset manufacturer has evaded taxes on about Rs. 3,000 crore.
It has been reported that nearly 20 officers are conducting this survey, and they are all probing an alleged tax evasion to the tune of nearly Rs 3000 crore ($543 million).
“Yes, raids are on. I will call back,” confirmed the Nokia spokesperson in Chennai.
This tax survey is being conducted at Nokia factor near Chennai and in Gurgaon.
“We are suspecting a default in TDS (tax deducted at source) on payments to other countries against software supplies,” said the Indian tax official.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) spokesperson Brett Young said the company was given no reason by Indian tax authorities for the tax raid, hence no further information details could be offered about the Tuesday raid.
Young remarked that the company is “ fully cooperating to ensure they get the necessary information to help in their inquiry,”
According to Economic Times India, an official from Indian tax authorities commented that the raids were expected to last till evening.
“We [don't] know whether production would come to a stop today or not. We will know in an hour,” said another IT official, who refused to reveal his identity.
Indian tax authorities reported that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) failed to follow the rules on tax payments and has been evading taxes on payments made to its parent company since 2005.
It appears that this survey is in relation to the tax allocation between India and Finland, The Wall Street Journal wrote.
Indian’s finance minister, P. Chidambaram, vowed to eradicate tax evasion from the country to cover a widening fiscal deficit.
News of the raid has resulted in a fall of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares from 2.3 percent to 3.20 euros by 11:42 GMT