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Supreme Court has directed the private telecom operator Ncell to NRs 21.10 billion as a Capital Gain tax. The Capital gain taxes apply to the company during its buyout from Teliasonera. Earlier SC has decided in favor of Ncell while challenging the amount asked by Large Taxpayer’s Office (LTO).
Releasing the final verdict of the decision, Ncell corrects the CGT amount to NRs 21,103,971,565 (21 Arba, 10 crores). Earlier LTO had calculated the amount of Rs 62.63 billion amount of which they asked to pay remaining NRs 39.06 billion. Dissatisfied with the amount, Ncell went to the apex court to challenge the amount.
A full bench of Justices Tej Bahadur KC, Purushottam Bhandari, Dambar Bahadur Shahi, Sumalata Mathhema and Manoj Kumar Sharma had come to the decision whose final verdict has been released on November 21, 2019. So, the tax amount will reduce significantly by around 18 billion. Ncell had already submitted the amount of NRs 23 billion to the Government on CGT and late fees.
Ncell’s CGT row started after the buyout of the company by Axiata from Teliasonera. At first, there was big confusion about whom should the LTO ask for the whopping CGT amount. There was a lot of discussion in and out of court on this. Then, SC decided to recover the taxes from Axiata and Ncell, in August 2019. Then came the issue of the amount by LTO for which Ncell did not agree and filed a petition to correct the miscalculation.
According to the rule, a company shall pay 25% of the total capital gain incurred by the sell-out, which comes to Rs 35.91 billion. Later LTO had made the calculation of NRs 62.63 billion with the inclusion of original CGT, its interest, late fees, and penalty. Now with the final decision, SC asks Ncell to pay NRs 21.10 billion more.
With the final verdict, it seems like the Ncell CGT case is resolved as the decision has been taken as per Ncell’s demand. Ncell needs to pay far less than that allotted by LTO. In all those times, people had mocked Ncell for their alleged escapade from the huge amount for the capital gain taxes. We hope they will be relieved from that with the remaining payment. If you want to read the whole document, you can read it here: the final verdict on the Ncell CGT case.