The Large Taxpayers Office has determined that Ncell should pay Rs 39.06 billion more in capital gain tax.
Swedish-Finnish company TeliaSonera has not paid capital gain tax for sale of its 80% stake in Ncell to Malaysian company Axiata in April 2015. The Large Taxpayers Office earlier had determined that TeliaSonera had made capital gain of Rs 143.65 billion during the sale.
The extended full bench of Supreme Court (SC) headed by Cholendra Shumsher Rana on February 6 had ordered that the capital gain tax be recovered from Ncell and Axiata.
The Large Taxpayers Office issuing a notice on Tuesday has determined that Ncell must pay Rs 62.63 billion in capital gain tax including interest until now. It has told Ncell, that has already deposited Rs 23.57 billion in two installments, to pay the remaining Rs 39.06 billion within seven days.
The full bench including Justices Meera Khadka, Bishwambhar Shrestha, Ananda Mohan Bhattarai and Tanka Moktan hearing a petition filed by Dwarika Nath Dhungel demanding the capital gain tax be recovered from Ncell on February 6 had issued a mandamus ruling that Ncell and Axiata should pay the tax.
The mandamus reasoned that Ncell has to pay capital gain tax to the Nepal government despite TeliaSonera selling the shares to Axiata as its business is based in Nepal.
The full judgement of the mandamus published on April 9 had ordered the government to recover the tax from the telecommunication company and its majority shareholder Axiata within three months.
The Large Taxpayer Office in the past had written to the Nepal Rastra Bank (NRB) to freeze TeliaSonera's bank accounts. But an interim order by the SC on December 18, 2017 revoked that allowing TeliaSonera to take the money.
Malaysian company Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from the Swedish-Finnish company TeliaSonera in April 2016. Reynolds Holding was TeliaSonera’s wholly-owned subsidiary, registered at Saint Kitts and Nevis, a tax haven.
Though capital gains tax needs to be paid by the company that gains from the deal, TeliaSonera has already exited Nepal.
Ncell has already deposited Rs 23.57 billion in two installments as tax applicable on the profit generated through sale of the telecom company. It had first paid Rs 9.97 billion in May, 2016 in tax return based on its own calculations. It had then paid Rs 13.60 billion on June 4, 2017 bowing to intense pressure and criticisms from a cross section of the society.
