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

Ncell submits Rs 14.33 billion to end the CGT dispute

Ncell submits NRs 14.33 to the government to end the long-pending Capital gain tax (CGT) case. As the private telco settles the issue after paying the remaining sum to the government for the tax on the amount they have gained after the sellout.

As per the LTO, the telecom company deposits the amount of additional Rs 14,33,56,52,546 which is 14 Arba and 33 crore rupees. So, in total, the company has paid NRs 23 Arba and 43 crore rupees as Capital gain taxes.

LTO now concludes that the dispute from Chaitra 29, 2072 has come to an end.

Find the detailed story of the Ncell CGT case below.

CGT would have been settled earlier with the SC verdict. But with the interim order of the International court, the Ncell tax issue took 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. Although Ncell did not submit as per the timeline, it is a good thing that the issue is resolved for now.

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

The government 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.

CGT (Capital gain tax)

The Capital tax gain taxes (CGT) of Ncell, after buyout from TeliaSonera to Axiata, had remained unsolved for around 4 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 challenged

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 the interim order from the international court, all believed that Nepal Government could not move ahead to enforce the SC verdict on the Ncell CGT case. It seemed like they need to wait for the final order which did not have a date yet. Although there was no final order, Ncell took the initiation to pay the whole amount to LTO, as per their letter.

CGT issue then moved back to 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. Some experts also said, “Ncell could be relieved with the tax amount if the international court comes to a final decision in sync with the interim order”. That prediction did not happen due to the insightful actions of the Large taxpayer’s office.

Ncell additional frequency

Earlier NTA barred Ncell from getting the additional spectrum in 1800 Mhz which they had won from the first-ever spectrum auction due to the pending CGT. But it has been more than a month that the company had received the spectrum after the implementation of the refarming of the band by NTA. Find more news on Ncell continuous 20 MHz spectrum in the 1800 MHz band.

Tell us what do you think of the Ncell CGT case and the controversy for a long period, in the comment box below.

Latest Gadget Deals 📣

iPhone 13
6.1-inch Super Retina XDR Display | A15 Bionic Chip | 1 Year Screen Breakage Insurance | Use Voucher

Rs. 114,990
Buy Now

Marshall Mode In-Ear Headphones
Big Sound Small Package | Available in Black/White | Microphone and Remote | Only on Daraz

Rs. 7,500
Buy Now

Apple Macbook Air M2
13.6-inch 256GB | 8-core CPU 10-core GPU | 1080p FaceTime HD Camera | MagSafe Charging Port

Rs. 167,900
Buy Now

Follow us on Facebook, Twitter, and Viber to get the latest news, and information about Nepal Telecom, Ncell, Smart Cell, ISPs, mobile apps, and phones in Nepal.

Recommended:




Comments
You might also like

Comments are closed.

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