Espoo, Finland-based Nokia was forced to abandon plans to include its Chennai plant in the sale of the handset business to software giant Microsoft, completed in April because of the tax dispute.

Nokia Group Executive vice-president and Group CEO Timo Ihamuotila, along with other company officials, met Sitharaman, who is also the Minister of State for Finance.

"The company has raised their tax issue which they are facing in India," sources aware of the meeting said.

After the meeting, a Nokia official said, "We are a very strong company in India. We have more than 16,000 employees here and we are pleased to be here."

Sources also said the Finnish firm may be looking for approval to sell the Chennai plant to pay its tax dues.

When contacted, a company spokesperson said, "Nokia continuously works with authorities in India to resolve tax disputes and seeking for amicable resolution of the disputes."

The Income Tax Department had informed the Delhi High Court that Nokia India and Nokia Corporation owed Rs 21,153 crore as total tax liability (existing and anticipated), including penalty during 2006-13.

Besides, the Tamil Nadu government had slapped the tax notice of Rs 2,400 crore, accusing Nokia of evading tax. It said Nokia had been selling the products produced from Chennai plant to the domestic market, instead of shipping them overseas.

Refuting the claims, Nokia on March 28 moved the Madras High Court.

Nokia, which completed sale of its handset business to Microsoft for over USD 7.2 billion in April this year, could not sell its Chennai manufacturing plant to Microsoft as it is embroiled in the tax dispute with the Income Tax Department and the Tamil Nadu government.

Last month, Nokia invoked the Bilateral Investment Promotion and Protection Agreement (BIPA) that India has with Finland to resolve the dispute.

(Agencies)

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