Supreme Court on Tuesday has continued its stay order for not to collect tax from Ncell. Earlier SC issued a temporary interim order until the discussion on May 6, 2019.
Ncell filed a petition against the government bodies’ decision (LTO: Large Taxpayers office) to recover Rs 39.06 billion. SC already decided before to recover the amount from Ncell for the buyout deal from TeliaSonera to Axiata. But the dispute is now on the amount of the Capital gain taxes, determined by LTO.
LTO claimed Rs 62.63 billion to be applicable to Ncell for the CGT. They also ordered Ncell to pay the amount within 7 days. Dissatisfied with the amount, Ncell moved to SC challenging the tax amount. They also claimed the remaining amount to be just Rs 14.5 billion.
They say LTO’s calculation is wrong as they did not deduct the advance capital gains tax that they had paid before.
Two years back, Malaysian company Axiata bought 80 percent stake of the telecom company through the offshore transaction. The rules say, Ncell should pay 25 % of the capital gains made in the deal. The deal amount was Rs 143.6 billion.
A joint bench of justices Sapana Pradhan Malla and Prakash Kumar Dhungana come to the decision for not to collect tax from Ncell, until further decision. They even fix a date on Jestha 21 (June 4, 2019) for the full bench discussion. We can expect the long pending issue to be resolved by then.
Tell us what do you think of possible outcome for the Ncell tax issue after this Supreme Court’s interim order.