<p>Nokia has won an appeal to release a local factory seized by authorities in a tax dispute, allowing the transfer of the plant as part of the sale of its mobile phone business to Microsoft.<br /><br /></p>.<p>The plant in Chennai is one of Nokia's biggest phone-making factories. Nokia had appealed its seizure and was trying to resolve the dispute ahead of the closure of the 5.4 billion euro Microsoft deal.<br /><br />Nokia had wanted the asset freeze to be lifted by December 12 to enable the transfer of ownership to Microsoft.<br /><br />But the tax dispute is still ongoing and if Nokia loses it may have to pay as much as $3.4 billion, including penalties for non-payment of tax and interest, according to a tax department lawyer.<br /><br />The Delhi High Court asked the Finnish company to deposit Rs 2,250 crore in an escrow account as a condition for lifting the freeze and transferring the facility to Microsoft.Nokia's case is one of several high-profile tax disputes involving foreign companies in India, which has stepped up its pursuit of claims against such firms as it seeks to rein in its budget deficit.<br /><br />Other foreign firms recently involved in tax disputes in India include IBM, Royal Dutch Shell, Vodafone Plc and LG Electronics Inc.<br /><br />An extended asset freeze as a result of the dispute would have blocked Nokia from transferring ownership of the Chennai plant, possibly forcing it to operate as a subcontractor for Microsoft.<br /><br />"There was the question, if Nokia couldn't sell this factory what should it do? Should they sell it later or should they be a subcontractor? This was some kind of uncertainty," said Pohjola Markets analyst Hannu Rauhala.</p>
<p>Nokia has won an appeal to release a local factory seized by authorities in a tax dispute, allowing the transfer of the plant as part of the sale of its mobile phone business to Microsoft.<br /><br /></p>.<p>The plant in Chennai is one of Nokia's biggest phone-making factories. Nokia had appealed its seizure and was trying to resolve the dispute ahead of the closure of the 5.4 billion euro Microsoft deal.<br /><br />Nokia had wanted the asset freeze to be lifted by December 12 to enable the transfer of ownership to Microsoft.<br /><br />But the tax dispute is still ongoing and if Nokia loses it may have to pay as much as $3.4 billion, including penalties for non-payment of tax and interest, according to a tax department lawyer.<br /><br />The Delhi High Court asked the Finnish company to deposit Rs 2,250 crore in an escrow account as a condition for lifting the freeze and transferring the facility to Microsoft.Nokia's case is one of several high-profile tax disputes involving foreign companies in India, which has stepped up its pursuit of claims against such firms as it seeks to rein in its budget deficit.<br /><br />Other foreign firms recently involved in tax disputes in India include IBM, Royal Dutch Shell, Vodafone Plc and LG Electronics Inc.<br /><br />An extended asset freeze as a result of the dispute would have blocked Nokia from transferring ownership of the Chennai plant, possibly forcing it to operate as a subcontractor for Microsoft.<br /><br />"There was the question, if Nokia couldn't sell this factory what should it do? Should they sell it later or should they be a subcontractor? This was some kind of uncertainty," said Pohjola Markets analyst Hannu Rauhala.</p>