The Supreme Court today quashed a decision of the Large Taxpayers' Office (LTO) to impose Rs 62.63 billion capital gain tax (CGT) on the Ncell Private Limited, popularly known as Ncell.
A five-member full bench of justices Tej Bahadur KC, Purushottam Bhandari, Dambar Bahadur Shahi, Sushmalata Mathema and Manoj Kumar Sharma has annulled the claim of LTO that the telecom service provider has to pay remaining Rs 39 billion as CGT as it has already paid Rs 23.57 billion.
The Ncell – on April 22 two days before the expiry of the seven-day deadline for settling the balance of the CGT assessment including fines and interest – had moved the Supreme Court challenging the CGT assessment made by the LTO. The telecom service provider claimed that it needed to pay only Rs 14.5 billion as CGT, and not Rs 39.06 billion as determined by LTO for the sale of its shares to Axiata Investment UK Ltd by the TeliaSonera. The SC had – after the Ncell’s claim – stayed the LTO’s decision to collect remaining Rs 39.06 billion tax. But today issuing a verdict, the apex court gave a ruling in Ncell’s favour and against Large Taxpayers’ Office (LTO) for determining Rs 62.63 billion as applicable CGT on Ncell buyout deal.
The Ncell had maintained that the tax assessment was against the SC verdict handed down by a larger full bench led by Chief Justice Cholendra SJB Rana on February 7 this year. The court verdict stated that Ncell and its parent company Axiata should pay the CGT and asked the LTO to assess the tax within three months. The LTO had simply transferred the assessed tax from TeliaSonera to Ncell and its parent company Axiata.
The LTO had officially determined Rs 62.63 billion as applicable CGT on the Ncell buyout deal on April 16 and ordered Ncell to deposit remaining Rs 39.06 billion, as the telecom company had already deposited Rs 23.57 billion as CGT and late fee.
Today the SC ruled that LTO’s decision to impose remaining Rs 39.06 billion CGT on Ncell was wrong, as the LTO calculated the whole due amount without deducting the advance CGT that Ncell had paid earlier. After the decision, the Ncell has to pay Rs 14.5 billion in CGT in the Ncell buyout deal by the Axiata Investment UK Ltd from the TeliaSonera, a public listed company from Scandinavian country that boosts transparency in financial dealings.
A five-member full bench of justices Tej Bahadur KC, Purushottam Bhandari, Dambar Bahadur Shahi, Sushmalata Mathema and Manoj Kumar Sharma has annulled the claim of LTO that the telecom service provider has to pay remaining Rs 39 billion as CGT as it has already paid Rs 23.57 billion.
The Ncell – on April 22 two days before the expiry of the seven-day deadline for settling the balance of the CGT assessment including fines and interest – had moved the Supreme Court challenging the CGT assessment made by the LTO. The telecom service provider claimed that it needed to pay only Rs 14.5 billion as CGT, and not Rs 39.06 billion as determined by LTO for the sale of its shares to Axiata Investment UK Ltd by the TeliaSonera. The SC had – after the Ncell’s claim – stayed the LTO’s decision to collect remaining Rs 39.06 billion tax. But today issuing a verdict, the apex court gave a ruling in Ncell’s favour and against Large Taxpayers’ Office (LTO) for determining Rs 62.63 billion as applicable CGT on Ncell buyout deal.
The Ncell had maintained that the tax assessment was against the SC verdict handed down by a larger full bench led by Chief Justice Cholendra SJB Rana on February 7 this year. The court verdict stated that Ncell and its parent company Axiata should pay the CGT and asked the LTO to assess the tax within three months. The LTO had simply transferred the assessed tax from TeliaSonera to Ncell and its parent company Axiata.
The LTO had officially determined Rs 62.63 billion as applicable CGT on the Ncell buyout deal on April 16 and ordered Ncell to deposit remaining Rs 39.06 billion, as the telecom company had already deposited Rs 23.57 billion as CGT and late fee.
Today the SC ruled that LTO’s decision to impose remaining Rs 39.06 billion CGT on Ncell was wrong, as the LTO calculated the whole due amount without deducting the advance CGT that Ncell had paid earlier. After the decision, the Ncell has to pay Rs 14.5 billion in CGT in the Ncell buyout deal by the Axiata Investment UK Ltd from the TeliaSonera, a public listed company from Scandinavian country that boosts transparency in financial dealings.
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