Ncell pays additional Rs 4.5 billion CGT
Kathmandu, December 31
Private telecom company Ncell has started paying its outstanding capital gains tax (CGT) levied by the government on the company’s buyout deal.
Of Rs 22.6 billion pending CGT that the Large Taxpayers’ Office (LTO) has asked Ncell to pay, the company today deposited Rs 4.5 billion at the tax office and has sought permission to pay the remaining outstanding CGT on instalment basis, informed Jhalak Ram Adhikari, chief tax administrator at LTO.
Following the verdict of the Supreme Court (SC), which determined Rs 22.44 billion as the remaining CGT liability of Ncell, the LTO had give the company an ultimatum to pay Rs 22.6 billion (including interest) on December 23.
As the Ncell CGT controversy is also being dealt with by an international tribunal, which recently ordered the government to halt CGT collection from Ncell, the telecom company had been in dilemma about whether or not to pay the tax. However, by depositing Rs 4.5 billion as CGT today, the telecom company has hinted at complying with the SC verdict and the LTO direction.
“Though Ncell has sought the facility of paying the remaining CGT in instalments, we are yet to take any decision on it,” informed Adhikari.
Even as Ncell has started to clear its due CGT, the controversy is far from over as it is still uncertain what impact the order of the international tribunal will have in this case.
Experts have been saying that the interim order issued by the international tribunal is obligatory for countries that are its members, and that the government’s move to collect the outstanding CGT from Ncell amid the International Centre for Settlement of Investment Dispute’s interim order is contradictory.
The interim order was issued on the basis of arbitration proceedings initiated by Axiata Investments (UK) and Ncell against the Nepal government.
Axiata Investments (UK) and Ncell moved the international dispute settlement court in April after LTO asked Ncell to foot the capital gains tax bill of Rs 62.63 billion on Ncell buyout deal.
At that time, Ncell had already paid Rs 23.57 billion to the government, but tax authorities were exerting pressure on the company to settle outstanding tax liability of Rs 39.06 billion immediately.
Thereafter, the company had moved the Supreme Court and the outstanding tax liability was reduced to Rs 22.4 billion.