The following case is a classic example of how the MNCs are dealing with the due tax to be paid by the to the Government of India.
The Income Tax Department has given notice to the mobile equipment manufacturing company NOKIA for an Income Tax of rs. 21,153 crores. The MNC has refused to pay stating that there is no tax to be paid and it will fight in the court. The company also stated that they are willing to close the case by paying a meagre amount of Rs. 3,000 crores, if the government agrees. Rs. 3,000 crore instead of Rs.21,153 crores!
A similar case is pending with Vodafone. It is to pay a tax of more than 12,000 crores. instead of paying it had gone to the court. The Finance Minister stated that negotiation can take place in the matter. In the same was negotiation may take with Nokia also.There is nothing wrong with negotiation. But what will happen with the UPA-II government is well known. The government will bends its knee before the MNCs and accept what they offer.
One the one side, the precious natural resources are sold to the corporates and MNCs for far less than their value and on the other hand even the due tax are not collected from them. It is not surprising that the Congress had to face ignominious defeat in the recent state assembly elections.