The SC delivered a decision in Ncell’s favour in a petition registered by the private telecom on Large Taxpayers’ Office for inflicting Rs 62.63 billion as relevant capital profits tax on Ncell for its buyout agreement.
A bench of the apex court stated that Ncell could be suspected to meet its CGT liability from 6 February 2019 during the SC granted the ruling and not the date the LTO managed to force CGT on Ncell.
A source stated that the SC revoked LTO’s judgment to force fine on Ncell, which suggests that the private telecom would presently have to pay just Rs 22 billion, along with some late fees.
The SC also revoked LTO’s judgment to force fine on Ncell as per 120 (a) of Income Tax Act 2002, which provides the LTO to force fine equal to fifty percent of the amount that the concerned organization declined to show in the report.
The source stated, “Today’s verdict means that Ncell needs to pay a total of around Rs 45 billion CGT since it has already paid around Rs 23 billion, it will now have to pay only Rs 22 billion more,” the source added.
The apex court noted that the LTO had fixed Rs 143 billion as profits in the Ncell buyout contract, which the SC also had endured.
The SC said in its verdict said, “But if the LTO finds evidence of more taxable income, then it is free to impose more tax on the telecom firm.”
The court stated that the LTO’s judgment to force fine on Ncell was wrong as it commanded fine without any firm proof, the SC expert continued.
The apex court stated that the LTO while discovering CGT for Ncell, did not let it furnish aspects of its activities and buyout.
The LTO had officially fixed Rs 62.63 billion as appropriate CGT on the Ncell buyout deal on April 16 and had established the private telecom firm to deposit Rs 39.06 billion, as they had previously deposited Rs 23.57 billion as CGT and late fee.
Axiata Group Berhad, by its wholly-owned subsidiary Axiata Investments (UK) Ltd, had got 80 percent stake in Ncell for $1.4 billion in December 2015.
On April 22 Ncell led the SC on the LTO, insisting that it obliged to pay a capital profits tax of only Rs 14.5 billion for the purchase of its shares to Axiata Investment UK Ltd.
The SC had waited for the LTO’s judgment to collect Rs 39.06 billion tax from Ncell.
Ncell’s parent company Axiata Group (UK) has presented a petition for agreement with the ICSID on the Government of Nepal, for levying CGT on the Ncell buyout contract stating Nepal’s plan violated its international law commitments following the bilateral investment treaty.
The law was announced by a full bench including of justices Tej Bahadur KC, Purushottam Bhandari, Dambar Bahadur Shahi, Sushmalata Mathema and Manoj Kumar Sharma.