• We deposited the unspent bonus into employees’ welfare fund and as per the provisions of Bonus Act and Labour Act it cannot be treated as our earning

Kathmandu, December 27 The Supreme Court today stayed Inland Revenue Department’s decision to tax almost 180 million unspent bonus of Surya Nepal Pvt Ltd. A single bench of Justice Om Prakash Mishra issued an interim order against the defendants — Large Taxpayers Office, Lalitpur, and IRD — till a final judgment on the case. The bench ordered the defendants not to execute its decision to tax the company’s unspent bonus of Rs 180 million, impose fines on the company for not paying income tax on the amount and to collect interest on Rs 180 million. The bench cited the precedent it set in a similar case on August 14, 2016, stating that the apex court had ruled in that case that unspent bonus could not be treated as a company’s income. According to Surya Nepal Pvt Ltd’s lawyer Senior Advocate Tulasi Bhatta, his client filed the case after defendants taxed the unspent bonus of Rs 180 million treating it as the company’s income. “We deposited the unspent bonus into employees’ welfare fund and as per the provisions of Bonus Act and Labour Act it cannot be treated as our earning,” Bhatta said. He said his client company earned about Rs 410 million bonus in the fiscal 2012-13 and had almost Rs 250 million unspent bonus. “As per law, 10 per cent of the profit earned by a company should be distributed to its employees as bonus. Most of the companies have unspent bonus as there is a limit of bonus that can be distributed to companies’ employees. As per the  provisions of Bonus Act and Labour Act,  70 per cent of  unspent bonus has to be deposited in company’s welfare funds created  for employees and 30 per cent into the government’s Labour Welfare Fund and my client company did the same,” Bhatta said. He added that the defendants had imposed almost 90 million fine on his client company, besides taxing Rs 180 million bonus and seeking to collect interest on Rs 180 million. Bhatta said his client company had deposited 30 per cent of unspent Rs 250 million bonus into the government’s Labour Welfare Fund and 70 per cent (almost 180 million) into company’s welfare fund created for employees. According to Bhatta, the IRD said it would not tax the 30 per cent unspent bonus deposited in the government’s Labour Welfare Fund but it would tax the unspent Rs 180 million bonus. Surya Nepal Managing Director Abhimanyu Kumar Poddar is the writ petitioner.