Income Tax department officials today conducted a survey operation on the premises of Finnish cellphone major Nokia in Chennai on charges of alleged tax evasion.
Sources in the department said the survey operation was conducted at the company's premises in the Tamil Nadu capital (under section 133 of the I-T Act) and few other locations in the country will be brought under this action.
When contacted, a Nokia spokesperson said in a statement to PTI, "Earlier today, tax officials visited Nokia's manufacturing unit in Chennai. Nokia is fully cooperating to ensure they get the necessary information to help in their inquiry.
"As a global company, Nokia consistently fields a large and steady number of tax queries, audits and assessments. Nokia's commitment to being a good corporate citizen is firm and unwavering. We always observe applicable laws and rulings in the countries where we operate. This has been a core principle of our operations in India, where Nokia has been present since 1995."
During a survey operation, I-T sleuths visit only official premises of a firm for investigation.
Sources said the I-T department is looking for some alleged mismatch in payments made by the company under the Tax Deducted at Source (TDS) category.
A team of about 30-40 I-T sleuths is involved in the operation, sources said.
Nokia led Indian mobile market with 22.2 per cent market share during first half of 2012 where 102.43 million handsets were sold, a CyberMedia Research said.
Nokia raided by tax officials
Finnish phone maker Nokia's said Indian tax officials raided its production unit in the southern city of Chennai on Tuesday.
A company spokesman said it was cooperating with the probe, although he could not elaborate on what local authorities were looking for. The Chennai plant is one of Nokia's biggest facilities.
A senior Indian tax official said the investigation related to allegations that the company may have evaded around 30 billion rupees ($543 million) in taxes.
"We are suspecting a default in TDS (tax deducted at source) on payments to other countries against software supplies," said the Indian tax official, who declined to be named. Nokia shares fell 2.3 percent to 3.20 euros by 1142 GMT.
India's finance minister, P. Chidambaram, has vowed to clamp down on tax evasion to help the country plug a widening fiscal deficit.
In November, a junior finance minister said India was investigating the local unit of chocolate maker Cadbury over taxes.