Kathmandu, November 21

The Supreme Court today determined Rs 21.1 billion as the remaining tax liability for Ncell, thereby ending a long-drawn debate over the amount the company should pay as applicable capital gains tax in its buyout deal.

Releasing the full text of its August 25 verdict that quashed the CGT liability determined by the Large Taxpayers’ Office today, the apex court stated that imposing additional 50 per cent fine on applicable CGT liability on Ncell was not as per the law and determined Rs 21.1 billion as remaining CGT that the private telecom company needed to deposit in the government’s coffers.

On April 16, the LTO had determined Rs 62.63 billion as applicable CGT in the Ncell buyout deal. However, since Ncell had paid Rs 23.57 billion as CGT to the government on 4 June 2017, LTO had determined Rs 39.06 billion as remaining CGT liability to Ncell.

Following LTO’s ultimatum to Ncell to deposit Rs 39.06 billion tax amount, the telecom firm moved the SC seeking a stay on LTO’s decision, arguing that the office had violated the due process while reassessing Ncell’s CGT liability. Primarily, Ncell had objected to LTO’s decision to impose 50 per cent fine on the applicable tax amount.

Subsequently, the SC ruled in Ncell’s favour on August 25, observing that it could be expected to fulfil its CGT liability from February 6, when the SC gave its ruling, and not the date the LTO mentioned for imposing CGT on Ncell.

However, the SC’s full text on Ncell’s case states that the company will have to pay interest and fine till the date it deposits the determined remaining CGT liability of Rs 21.1 billion.

A five-member panel of SC Justices Tej Bahadur KC, Purshottam Bhandari, Damber Bahadur Shahi, Manoj Kumar Sharma and Susmalata Mathema had determined the remaining applicable CGT for Ncell.

The LTO stated that it had yet to receive the full text of its previous verdict on the Ncell case. “Remaining taxes will be collected from Ncell based on the SC’s full text verdict on the case,” Jhalak Ram Adhikari, chief tax administrator at the LTO said.

Meanwhile, calculation and determinination of the tax amount by the SC on its own has raised eyebrows. “The SC has the power of judicial review. It generally decides if something is lawful or unlawful and gives tips, instructions and direction,” said constitution expert Bhimarjun Acharya.