Ncell lodges petition at Supreme Court challenging tax amount set by Large Taxpayers Office

Kathmandu / Apr 22: A day before the expiry of the seven-day deadline to pay its capital gains tax, Ncell, a private telecom giant, on Monday lodged a petition at the Supreme Court, saying the Large Taxpayers Office has wrongly determined their tax liability at Rs39.06 billion.

In line with the Supreme Court order to authorities to collect capital gains tax from the private sector mobile company and its parent firm, Axiata, the Large Taxpayers Office on April 16 determined their capital gains tax liability at Rs39.06 billion and served a seven-day deadline to clear the dues

The telecom company has argued in its writ that its outstanding tax stands at Rs14 billion.

After TeliaSonera, which earlier owned Ncell, exited the country after selling the telecom company to Axiata on April 11, 2016, as per an acquisition deal–the biggest in Nepal’s corporate sector–signed in December 2015, the capital gains tax was determined at Rs 143.6 billion.

Ncell has already paid Rs23.57 billion in total—Rs21.54 billion as capital gains tax and Rs2.02 billion as fine.

So the tax office said last week Ncell should now pay the remaining Rs39.06 billion.

In its petition, Ncell has said Rs21.54 billion it paid earlier was 15 percent of the total capital gains in the buyout deal amounting to Rs143.6 billion. “Of the 25 percent tax liability, 15 percent has been paid, and the rest 10 percent means the company needs to pay Rs14.36 billion,” the mobile firm said in the petition, demanding an order of mandamus along that line to the tax authorities.

Ncell has also sought an order from the court [to authorities] not to create any kind of obstructions in Ncell’s business until the case is fully settled and tax is determined.