April 12: The Supreme Court’s verdict on the Ncell case has been published but legal experts say that it lacks clarity. While there are speculations going around, experts say that the verdict is not complete and there are certain ambiguities, especially relating to two issues.

Anjana Neupane, an expert in foreign investment, told New Business Age that the apex court verdict left out two major issues. According to her, there are three types of taxes applicable in Nepal during the buying/selling of any company.  

Section 9 of the Income Tax Act states that any individual or company benefitting from capital gains must pay 25 percent tax. Likewise, Section 95 of the same act says that the company itself must deduct 15 percent of the 25 percent capital gains tax (CGT) while buying/selling of company. However, the SC verdict does not specify who should be liable to pay this tax. This is the reason why Neupane calls the verdict incomplete.

The SC verdict has directed the concerned authorities to determine the tax Ncell is liable to pay within three months and bar the company from distributing its dividends and shares until it clears the due.

Ncell has acknowledged receiving the SC verdict through advertisements in various media and has said it is reviewing the SC order.

The Large Tax Payers’ Office must determine Ncell’s liable tax within three months. If Ncell is not satisfied, it can appeal at the Revenue Tribunal by posting 50 percent of the amount as deposit. The case will likely be forwarded to the SC again.

Secondly, the name Axiata is not mentioned anywhere in the litigation but the apex court verdict has included Axiata Berhad as well. Reynold Holdings is the shareholder of Ncell while Axiata (UK) is the shareholder of Reynold Holdings not Axiata (Berhad).

Due to this, legal experts argue that the SC verdict itself is in question.