BackLift Nokia asset freeze so others can run factory: Tamil Nadu CM
At governing council meeting of the NITI Aayog, Panneerselvam said some policies of the Centre affected the investment climate in Tamil Nadu
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Chennai: Tamil Nadu chief minister O. Panneerselvam on Sunday said if the Centre lifted the asset freeze on Nokia, it will help the state open the defunct factory to other mobile handset makers.
At governing council meeting of the NITI Aayog in New Delhi on Sunday, Panneerselvam said some policies of the central government affected the investment climate in Tamil Nadu. The chief minister said that retrospective amendments to the Income Tax Act in 2012, with effect from 1976, have hurt the state.
The penalty on mobile handset manufacturing plant located in Tamil Nadu has led to the closure of the unit. He did not mention Nokia by name.
Other handset manufacturers are willing to step in to open the unit and this has to be facilitated by lifting the assets freeze imposed by income tax authorities, he said in a press release.
In September 2013, Microsoft Corp. acquired the mobile handsets unit of Nokia. However, the facility at Sriperumbudur near Chennai was not part of the global acquisition because of the ongoing ₹ 21,153 crore tax dispute between Indian tax authorities and Nokia. Due to liens on Nokia’s handset manufacturing facility, the site was left out of the devices and services deal that closed on 25 April 2014.
Microsoft informed Nokia that it will terminate the manufacturing services defined in the agreement with effect from 1 November 2014. In absence of further orders from Microsoft, Nokia suspended handset production at the facility in November.
Domestic electronic hardware manufacturing is at a tremendous disadvantage due to the inverted duty structure wherein the finished products can be imported duty-free under the ITA Agreement of 1998, while components are levied a duty, said Panneerselvam.
Already, 65% of domestic demand is met by imports and Indian 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, he added.
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