Income Tax gets forensic experts to check Nokia's computers

CHENNAI, INDIA: Two computer experts from the Central Forensic Science Laboratory (CFSL) are checking the computer systems of Nokia India's plant near here to ascertain the phone maker's mode of downloading software from its Finnish parent company, said a senior Income Tax department official.

"We want to be doubly sure about our case that Nokia India has been evading tax to the tune of around Rs.3,000 crore," the official told IANS on the condition of anonymity.

The IT department has charged the company of not deducting tax at source on the payments made to its parent company and also violating the transfer pricing norms to the tune of around Rs. 10,000 crore.

The two-member team from the Hyderabad-based CFSL checked the computer sytems at Nokia India's factory for nearly seven hours. "Earlier when questioned separately, Nokia officials gave differing views on the mode of software download and other aspects. Hence we decided to bring in experts from outside," the IT official said.

Confirming the development, Poonam Kaul, director-communications at Nokia India, told IANS over phone from New Delhi: "We are cooperating with the officials. "Early last month, a team from IT department's tax evasion wing "surveyed" Nokia India's plant and corporate office in Haryana and submitted a 150-page interim report.

In IT parlance, "search" and "survey" are different. In a search, the business and residential premises are searched and the officials have the power to seize documents, while a survey is done only in the business premises when there is a suspicion of tax evasion. The IT department charged Nokia with changing its accounting model and reorganising its existing business model to avoid direct and indirect taxes.

The department said that it has a strong prima facie case of tax avoidanc e against Nokia's Indian subsidiary. For the past six years, the company has paid around Rs.30,000 crore to its Finnish parent without deducting tax at source at 10 percent.

According to the department, Nokia India has been downloading software from its parent company to make the handsets here. Nokia's Indian plant near here makes over 20 different models and is one of its largest global facilities involving an outlay of around $300 million.