No tax dispute with Nokia, clarifies Minister

Chennai: State industries minister P. Thangamani denied that the government was involved in a tax dispute with Finish mobile handset maker Nokia and blamed the ‘flawed policy’ of the previous Congress government at Centre in paving way for the company’s exit from TN.

“There is no production at the Nokia factory (in Sriperumbudur) and owing to the intervention of the government under Chief Minister Jayalalithaa 900 employees were retained by Nokia and are being paid wages even if they do not have work. The reason for the crisis in Nokia is due to the flawed policy of the previous Congress-led UPA government,” he told the assembly on Friday.

Intervening the speech of CPI(M) leader R. Soundararajan, during a discussion on the demand for grants for department of labour and employment in the assembly, Mr Thangamani said the previous Congress government’s decision to claim retrospective income tax in 2012 resulted in a legal tussle between the Finnish company and the income tax department in the Supreme Court. This led to the factory near here being left out of the global deal.

“Many workers who faced uncertain future had left the company on VRS availing benefits ranging from '3 lakh to '10 lakh. It was only due to the state government’s intervention that at least 900 workers were retained,” the minister said

When the member sought the government’s intervention, the minister retorted, “How do you expect the government from preventing the workers from availing VRS? How long can the firm pay salaries without production?” He added that the government had competed aggressively to attract investment from Nokia and denied that the firm was extended any tax concession.