Kathmandu, June 15
The Supreme Court rescinded its stay order issued on May 18 prohibiting the government from collecting value added tax or imposing fine on taxpayers for not paying taxes during the period of the ongoing prohibitory order or lockdown.
A division bench of justices Ananada Mohan Bhattarai and Nahakul Subedi issued the new order in response to a writ petition filed by the Ministry of Finance. Rescinding the stay order issued by a single bench, the division bench said that taxpayers wouldn't have to pay value added tax or be imposed any fine for not paying tax only for the period stated by the government.
This means that even during the current lockdown, the government can collect tax.
The bench observed that as per Section 19 of Fiscal Act, the government could extend the deadline for collection of tax and could ease the process in times of extraordinary situations and the current lockdown was one such situation. The division bench said that since the government would take a call as per Section 19 of Fiscal Act, it decided not to continue the stay order issued by the single bench.
The Supreme Court had on May 18 issued an interim order to the Ministry of Finance asking it not to collect value added tax or impose fine on taxpayers for not paying taxes during the period of the ongoing prohibitory orders.
The order was passed by a single bench of Justice Meera Khadka in response to a public interest litigation filed by Advocate Srijana Adhikari against the Ministry of Finance and others.
The bench had observed that as taxpayers were also hit by the second wave of COVID-19, taxpayers couldn't be expected to submit their business details and deposit taxes during the lockdown.
A version of this article appears in the print on June 16, 2021, of The Himalayan Times.