Tuesday, December 31, 2019

Ncell pays Rs 4.5 billion in CGT

Ncell has started paying its outstanding capital gains tax (CGT), though in installment.
“Of Rs 22.6 billion pending CGT that the Large Taxpayers’ Office (LTO) has asked Ncell to pay, it has deposited Rs 4.5 billion at the tax office today,” the LTO confirmed, adding that the Ncell has also sought permission to pay the remaining outstanding CGT on installment. “Though Ncell has sought the facility of paying the remaining CGT in installments, the LTO is yet to take decision on it.”
According to the section 110 (A) of the Income Tax Act, the tax officer can provide the facility of paying outstanding tax on an installment basis, if the taxpayer makes a written request for such a facility before the tax office files a case in court against such taxpayer.
After a prolonged court battle, the Supreme Court (SC) had determined Rs 22.44 billion as the remaining CGT liability of Ncell. The LTO has thus given Ncell an ultimatum to pay Rs 22.6 billion – including interest – on December 23.
By depositing Rs 4.5 billion as CGT today, the telecom company has hinted at complying with the SC verdict and the LTO direction, the LTO claimed, adding that Ncell has though been concerned over CGT controversy, it has moved to an international tribunal, which recently ordered the government to halt CGT collection from Ncell.
The interim order issued by International Centre for Settlement of Investment Disputes – World Bank’s dispute settlement body on international investment – is obligatory for countries that are its members and the government’s move to collect the outstanding CGT from Ncell amid the International Centre for Settlement of Investment Dispute’s interim order, is contradictory. Ncell, along with Axiata (UK), which now owns Reynolds Holding, filed an application at the global investment settlement body, in April claiming that Nepal’s conduct in relation to capital gains tax imposed on the mobile company is against the Bilateral Investment Treaty between Nepal and the United Kingdom (UN).
Axiata Investments (UK) and Ncell moved the international dispute settlement court in April after LTO asked Ncell to foot the capital gains tax bill of Rs 62.63 billion on Ncell buyout deal.

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