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The Tamil Nadu government has called for lifting the asset-freeze imposed by the central income tax authorities on Nokia’s now-shut factory near here.
Speaking at the first meeting of the governing council of the NITI Aayog at Delhi on Sunday, Chief Minister O Paneerselvam said this would facilitate other handset manufacturers who were willing to get this unit opened and open others, too. He didn’t directly name Nokia but it is the first time the state has openly asked the Centre to unfreeze the plant.
Speaking at the first meeting of the governing council of the NITI Aayog at Delhi on Sunday, Chief Minister O Paneerselvam said this would facilitate other handset manufacturers who were willing to get this unit opened and open others, too. He didn’t directly name Nokia but it is the first time the state has openly asked the Centre to unfreeze the plant.
The plant suspended operations at Sriperumbudur, near Chennai, with effect from November 1, 2014, since it could not transfer this asset to Microsoft, in a global sale. The plant was frozen by the I-T department, in the wake of a Rs 21,000-crore tax notice. The closure resulted in the loss of an estimated 30,000 jobs, directly and indirectly. The CM said other handset manufacturers were willing to step in to open the unit and this had to be facilitated by lifting the asset freeze.
“Domestic electronic hardware manufacture is at a tremendous disadvantage due to an inverted duty structure, wherein finished products can be imported duty-free, while components are levied a duty. Already, 65 per cent of the domestic demand is met by imports and the electronics import bill is projected to exceed the oil import bill by 2020. Policy corrections in this area are vital for the Make in India campaign to have meaning,” said the CM.
TIMELINE CHRONOLOGY OF EVENTS
January 2013
IT department survey’s Nokia Chennai and Gurgaon premises
February 2013
Nokia filed letters of objection protesting against the actions taken by the IT authorities at Chennai
May 2013
The Income Tax Appellate Tribunal (ITAT) asks Nokia to approach DGIT (I-T) for stay of demand
June 2013
DGIT (I-T) directed IT department to offer an installment plan and grant conditional stay
Nokia pays Rs 700 crore in installments following June 21, 2013 order
September 2013
IT department freezes Nokia’s assets and accounts; Nokia moves to Delhi High Court
Delhi HC unfreezes Nokia’s accounts but attachment of other fixed assets continues
$7.44 billion Nokia – Microsoft deal announcement
December 2013
HC unfreezes Chennai assets and allows Nokia to sell the plant to MS with subject condition of Rs 2,250 crore or higher amount to be put by Nokia India into an ESCROW account, Nokia continues to pay Rs 700 crore, to be deposited in the escrow account, a letter of guarantee by Nokia Finland for Rs 3500 crore amongst others
February 2014
Nokia moves to Supreme Court seeking smooth transfer of assets and waiver of conditions
March 2014
IT officials moves to SC to stop the transfer of Chennai plant to MS
SC dismisses Nokia’s appeal and directs them to HC judgment
Tamil Nadu tax department sent a notice to Nokia for Rs 2,400-cr sales tax
Nokia files writ to protest Tamil Nadu tax department claim
April 2014
VRS was offered to employees. Around 700 contract workers opt for VRS
Nokia- MS transaction closed
Tamil Nadu High Court orders reinvestigation of the case. Also asks Nokia to pay 10% of Rs 2400 crore tax claims by Tamil Nadu sales tax department within 8 weeks. Nokia will now appeal to the division bench to overturn the deposit recommendation
May 2014
VRS Schemes ends.
November 2014
Company suspends operations at Chennai factory
January 2015
Tamil Nadu Government reduced tax claim to Rs Rs 912 crore from Rs 2400 crore
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Facts: END OF THE ROAD
Dec 1, ‘04: Nokia announces decision to set up a plant in India
Apr 6, ’05: Signs MoU with the Tamil Nadu govt to set up the plant in Sriperumbudur SEZ and invites seven of its partners to invest. Initially, it commits investment of about $150 million in five years
Jan 2, ‘06: Plant starts commercial production of handsets
Mar 11, ‘06: Sriperumbudur facility inaugurated by Finland PM. Factory starts with low and mid-range GSM handsets
Jun ‘09: Factory edges past China as a unit-wise volume producer of Nokia cellphones and becomes Nokia’s largest cellphone manufacturing facility in the world
May 1, ‘10: Crosses 250- million handset mark and starts exports to North America and Europe
May 5, ‘11: Production crosses 500-million mark
End of Mar ‘14: Cumulative production at 800 million handsets. It exported phones worth about $2 billion a year. Nokia India's overall turnover between FY06 and FY12 at Rs 151,000 crore
