Supreme Court has temporarily stayed the order for tax collection from Ncell, after the 2 weeks of its own decision (Full text). Based on the decision, Large Taxpayers office had given 7 days time to pay Rs 39.06 billion. After which, Ncell moved to SC challenging the amount.
The Supreme Court decision to recover Capital Gain taxes from Axiata has not paved the way to resolve the issue. Now, it seems it will take more time to resolve and opened up the further debate.
Temporarily stay till May 6
A single bench of justice Bam Kumar Shrestha decided not to collect the CGT from Ncell until further discussion on May 6. That time, SC called both parties Ncell and LTO to discuss on the issue and they will take decision based on it. The court also issues a show-cause notice to the defendant in response to Ncell’s petition in which they also claim of just Rs 14.5 billion rather than Rs 39.08 billion.
With the decision, Ncell Capital gain tax is one of the most controversial issue pending since the acquisition of Ncell telecom company by Axiata from TeliaSonera.
As per the rule, the capital gain taxes amount to 25% of the total gain from the sell-out. Earlier, there was a debate on who is responsible for the Capital gain tax amount.
In the petition, they claim that out of the 25% tax liability, they have already paid 15 percent (Rs 21 billion) and they will further pay Rs 14.36 billion for the remaining 10%.
Now that SC decision made Axiata pay the Capital gain tax amount, Ncell argues that LTO did not invite them to present their views while calculating the CGT amount. They also argue that the decision did not ask to include any interest or late fees which they have put in the total amount.