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Tax evasion case filed against Bottlers Nepal



tax-evasion-case-filed-against-bottlers-nepal

By Modnath Dhakal
Kathmandu, Mar. 12: The Department of Revenue Investigation (DRI) has filed a case at the Patan High Court against Bottlers Nepal Limited claiming Rs. 7.43 billion dues to the government including fines.
It claimed that the Nepal franchise of the global giant in soft drink production evaded taxes through offshore indirect transaction of its shares.
“Bottlers Nepal Limited did not pay the taxes while trading its shares through offshore indirect transaction which is against Revenue Leakage (Investigation and Control) Act, 1995. The crime is proved,” said the DRI in its statement on Friday.

The demanded dues include Rs. 3.71 billion company’s tax liability and 100 per cent fine on that amount. In the case filed at the court, the DRI has demanded for jail terms for various persons related to the company as well as raising the interest of the due amount.

The indictment is filed for the company’s shares transaction in 2014 when the majority shares of Bottlers Nepal owned by CocaCola Sabco Asia Limited based in Dubai of the UAE were sold to the Ireland-based European Refreshment.

It changed the share structure, ownership and control in the company but all of it happened without the notice of the government and concerned agencies in Nepal. The company did not pay any capital gain taxes to the government as well.

The share price of Bottlers Nepal was Rs. 3,883 per unit. Sabco Asia had bought the shares at Rs. 536 which means the company earned Rs. 3,347 profit in each unit of shares. “This means that the company did not pay the capital gain tax of Rs. 1.24 billion for the profits of Rs. 4.96 billion which it earned by selling 1,484,301 units of shares,” said the DRI.
These altogether make Rs. 3.71 billion liability in the part of Bottlers Nepal to the government.

As per the Income Tax Act, 2001, 25 per cent capital gain tax is charged on such transactions. The DRI has demanded Rs. 341 million fee for the transactions, 15 per cent interest which amounts to Rs. 1.10 billion and other fees of Rs. 1.24 billion from the company.

Bottlers Nepal Limited, board members of the then CocaCola Sabco Asia, who were the shareholders in the CocaCola Southwest Holding Limited in the United Arab Emirates – Shulka Wassan, Melvin Tan Chun Pin, Mohamed Amin Ghoneim, Gaurav Khosla, Sundeep Bajoria, Debabrata Mukherjee, Sumanta Datta, Jawahar Solai Kuppuswamy and Sanket Ray are made defendants in the case. They represent the Southwest Holding in the Bottlers Nepal.

Likewise, managing directors of bottlers Nepal Pradip Pandey and Puneet Chandrapal Varshney, finance managers Rajeev Tandon, Bharat Babu Dahal, Sumit Goyal, finance controller Ashok Kumar Mandal, Board Director Dr. Trilochan Uprety and Chartered Accountant Sanjib Kumar Mishra have also been listed as the defendants in the indictment.
The case was first brought to the public by journalist Gajendra Budhathoki and he has been continuously following up the story in Taksar magazine.