Dissent in Nokia tax verdict may mean more litigation

The case was referred to the bench by the high court here. It referred to global sales of Finland-based Nokia Networks OY for the assessment years 1997-98 and 1998-99

A dissenting judgment in the majority order by a tax tribunal over the issue of permanent establishment (PE) has fuelled fear of more litigation. 

The Income Tax Appellate Tribunal (ITAT) ruled in favour of Finland-based Nokia Network OY, engaged in manufacturing of advance mobile and fixed telephony equipment and systems.

It has said their subsidiary in India does not constitute a PE hence, the parent company is not liable to pay taxes on global sales. 

However, a three-member Bench gave this ruling by a majority judgement. There was a dissenting one, which said the subsidiary — Nokia India Pvt Ltd