NepaliTelecom.com
All information, news, offers of Telecommunication in Nepal

LTO asks Ncell to pay tax within 15 days, despite ICSID order

Ncell CGT case seems to have been settled with the new SC verdict. But with the latest interim order of the International court, the Ncell tax issue will definitely take more time to resolve. International Centre for Settlement of Investment Disputes (ICSID) issued an interim order to halt the tax collection from Ncell. Despite the order, LTO (Large Tax payer’s office) asked Ncell to submit the tax within 15 days.

The LTO’s letter is based on the recent verdict of the Supreme court which had some relief on the amount of tax applied to Ncell, for the buyout deal. Now Axiata Ncell will be relieved from the obligations if the ICSID holds on to the decision till final.

As known, the government has planned to begin action against Ncell if they do not pay the Capital gain tax within 15 days. THT says they are to follow the income tax act for failing to meet the deadline for the tax payment.

LTO receives ICSID letter

On the same day, LTO has received the ICSID letter with the directives not to enforce the tax collection from the private Telco Ncell. It is known that the ultimatum has been given before the letter arrived. Further, they will discuss with the Ministry of Finance, Office of the Attorney General and IRD to plan future steps for the Ncell tax collection.

CGT

The Capital tax gain taxes (CGT) of Ncell, after buyout from TeliaSonera to Axiata, has remained unsolved for more than 3 years. Axiata bought an 80% stake in Ncell from TeliaSonera at Rs 144 billion. As per the rule, the capital gain taxes sums at 25% of the total gains in the deal. The government could not get the tax from the Ncell buyout deal which makes it controversial for the long term.

After several court decisions, finally, the CGT amount was put under Axiata and Ncell’s responsibility. Following this, LTO calculated Rs 62.63 billion to collect from the Ncell as CGT tax. That calculation included the tax amount, its interest, late fees, and the penalties. Ncell had already paid some amount as the taxes to the government which would be deducted from the total liability.

Ncell challenges

Dissatisfied with the amount, Ncell challenged it not only in the Apex court but also moved to ICSID claiming “the Nepal government contravenes the bilateral agreement with the imposing of the CGT”.

The Supreme Court decided in favor of the Ncell, asking it to pay NRs 21.10 billion only, which is low than that of LTO’s calculations. After a month of the decision, the ICSID issues an interim order for the arbitration process.

With this interim order from the international court, Nepal Government could not move ahead to enforce the SC verdict on the Ncell CGT case. They need to wait for the final order which does not have a date yet.

The CGT issue has now gone to the previous discussion as to whether the buyer or seller is liable for the taxes with the deal in ownership transfer. The global practice has it that Capital gain taxes are normally accounted to the sellers.

Axiata Ncell was not pleased with the earlier Apex court’s decision to make them accountable for the capital gain taxes. So, Ncell could be relieved with the tax amount if the international court comes to a final decision in sync with the interim order.

Ncell additional frequency

Ncell recently became the successful bidder for the first-ever spectrum auction of 1800 MHz band. However, there was a decision that they would be awarded the frequency once they paid all the dues to NTA, including the Capital Gain taxes. As the CGT issue will remain unresolved for more time, Ncell will not get the additional frequency until that time.

Follow us on Facebook, Twitter, and Viber, to get latest news, information about Ntc, Ncell, Smart Cell and phones in Nepal.

Recommended:




Comments
You might also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy