KATHMANDU: Inland Revenue Office (IRO) area no. 1 has penalized three catering services — Anamol, Indreni and Amritbhog — for not paying revenue to the government. Last week, an IRO team found that they were breaching the value added tax (VAT) laws.

The IRO slapped a Rs 500,000 fine on Anamol and Rs 490,000 on Indreni. Amritbhog has not paid the penalty and is planning to appeal in a revenue court for rebate in tax.

“Actually, it wants a deduction of the building depreciation cost,” said Shishir Kumar Dhungana, chief tax officer, “We are considering Amritbhog’s demand and we think it will be settled soon.”

Anamol, Indreni and Amritbhog were not issuing VAT bills to their customers. IRO is investigating other potential tax evaders. “We are investigating two-three cases daily,” said Dhungana. The office takes action on the basis of complaints or its own market investigation. “If a firm’s tax status and market investigation does not tally, we take action,” he said.

The office is investigating 15 cases of breach of tax laws. According to Dhungana, their investigation is a sample based study of catering services, private schools, school dress suppliers and education consultancies. He however, declined to name those firms. “I cannot name them in the middle of the investigation,” he said.

IRO is expecting to collect at least Rs 500,000 in fines from the firms that are under investigation. “There is breach of laws in each case, and we are investigating its depth,” he said. Inland Revenue Department (IRD) and line offices have stepped up their investigation in the market to bring offenders in the tax net.

Earlier on June 24, IRD officials had conducted raids in Kathmandu and Pokhara after they received complaints against Progress Education Consultancy (PEC), Commodities and Metal Exchange Nepal (COMEN) NAME consultancy and Saleways Department Store. PEC was found guilty of issuing duplicate bills.

“We have found a reduction of the billing amount in their bills register,” said Dirgha Raj Mainali, director of IRD’s monitoring unit.

IRD had fined PEC Rs 9.5 million for VAT evasion whereas a case of non-filing of income tax is still under investigation. “According to our estimate, PEC has to pay at least Rs 2.5 million income tax,” he said. According to Mainali, IRD raided those companies to find out the policy reform measures.

Meanwhile, IROs of Kathmandu (areas no. 2 and no. 3), Lalitpur and Bhaktapur

also have intensified their market monitoring frequency to bring companies and individuals in the tax net. “We have identified potential taxpayers and will corner them soon,” said Mainali.