Ncell Tax Row Lingers on Despite CGT Settlement

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Ncell Tax Row Lingers on Despite CGT Settlement

January 13: Nepal’s private telecommunication giant Ncell has knocked the doors of the Supreme Court after government authorities demanded tax of Rs 60 billion for the ownership transfer of the company some five years ago after making revision to its initial assessment.

Ncell has already cleared the Capital Gains Tax  (CGT) in installments for the transfer of ownership from TeliaSonera to Axiata.

Ncell recently filed a case against the government for demanding tax although the case was earlier settled by the Supreme Court. The latest hearing was supposed to be held on Tuesday (January 12) but could not take place on the stipulated date. According to Supreme Court’s Spokesperson Bhadrakali Pokharel, discussions will be held in the next hearing but could not give the exact date of the hearing.

The Large Taxpayers Office decided to collect tax of Rs 60 billion from Ncell in accordance to Section 57 of the Income Tax Act for the transfer of its ownership.

The income tax act states that a company must pay 25 percent tax of its net worth for the transfer of ownership of 50 percent or more shares. Therefore, the LTO has determined that Ncell is liable to pay Rs 60 billion to the government.

Although the government has already collected CGT from Ncell, it had not determined taxes under the Income Tax Act.

Dissatisfied by the government’s initial assessment of around Rs 60 billion including fines and late fee, Ncell had earlier moved the Supreme Court. The apex court settled the issue by determining the CGT amount of around Rs 21 billion.

Ncell had also filed a case at the Washington DC-based International Centre for Settlement of Investment Dispute (ICSID).

The international tribunal had issued an interim order stating that Ncell is not liable to pay the tax. However, the case is still sub judice.

In the latest lawsuit filed by Ncell, the telecommunication company has requested the Supreme Court to issue an order to invalidate all the notices of the government. Ncell has claimed that it has already fulfilled its obligations.

“The current issues has already been settled twice by the full bench of Supreme Court,” reads the petition filed by Ncell.

 

 

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