Supreme Court issues the full text of its verdict on controversial tax liabilities of ISPs

Internet service providers (ISPs) are now left with no option than to clear their tax dues to the government as the Supreme Court unveiled the full text of its five-month old verdict against the ISPs on Tuesday.

Amid uncertainty in undisrupted internet service supply due to the ongoing tussle between the government and the ISPs, the apex court has paved the way for the government authority to take necessary measures in line.

Pradip Paudyal, spokesperson for the Nepal Telecommunications Authority (NTA) said the authority had been waiting for the full text of the Supreme Court’s verdict to move forward. “As the full text has come up now, we will start consulting with other government bodies to fix the modality of payment or to take necessary actions against those who will refuse to pay the dues as per the law,” Paudyal said.

The NTA has ascertained the financial liabilities of the ISPs at Rs 3.64 billion under the headings of rural telecommunications development fees and royalty charges on maintenance from the public. While the government had been pressing the service providers to clear the dues, the companies concerned have been refusing to pay the amounts that were collected under the headings since the fiscal year 2017/18.

Falling into pressure to collect the dues, the ISPs turned to the Supreme Court seeking its favors to their side. Through issuing the full-text now, the apex court has instructed them to obey the government enforced guidelines along with scrapping all eight writ petitions filed by the ISPs.

The Office of the Auditor General in its annual reports has been pointing out the apathy shown by the ISPs for the past six years. Likewise, a study team formed by the Ministry of Communications and Information Technology (MoCIT) under Joint Secretary Gaurav Giri had also found out the tax evasion by the ISPs.

Amid mounting controversies between the government and the service providers, the MoCIT for the past one year has refused to recommend the ISPs from receiving the foreign exchange facility from Nepal Rastra Bank to clear their outstanding dues to Indian companies. Due to this reason, Nepalis experienced a massive disturbance in internet services in the first week of May, mainly after they failed to clear the dues that they owe to Indian bandwidth providers.

Nepali ISPs have been solely depending on the Indian bandwidth providers to get the internet service. Although Nepal and China have set up optic fibers through Rasuwagadhi-Kerung border in 2018, Nepali companies have failed to purchase bandwidth in a notable amount from China, according to the NTA officials.