Apparently shocked by the Tamil Nadu sales tax department slapping a Rs 2,500-crore VAT claim on Finnish handset major Nokia, the Indian Cellular Association (ICA), the apex body of cellphone-makers in the country, has asked Tamil Nadu CM J Jayalalithaa to intervene.
An ICA letter to Jayalalithaa, which was circulated to the media, termed the step as unconstitutional and violative of the due process of law. It urged the CM to reverse the ‘unwarranted’ actions of her officers. ICA president Pankaj Mohindroo said in his letter: “We are writing to you in extreme distress. An urgent appeal to you to kindly ensure that the process of law is not vitiated. The reputation of Tamil Nadu as a well-governed state is under attack. We are sorry to point out that some officers of your government in the VAT department seem to have taken unwarranted actions.”
He said they have issued demand of huge VAT and hundreds of crores in export cases. The mobile makers’ body pointed out that such a step would send a wrong signal to investors globally.
It said exports were not leviable to VAT anywhere in the world, including India, and this is especially so in SEZs where entire production is to be exported under customs bond. “Exports are under the central government while local sales are with the state VAT department,” ICA said and urged the CM to take “urgent emergent action in having the matter examined and status quo restored”.