The Tax Investigations Department on Friday filed a complaint against Bottlers Nepal, the bottler of the popular CocaCola soft drink in Nepal, former shareholders and immediate senior staff of the company in the Patan High Court, accused of tax evasion. amounting to 3.71 billion rupees.
According to the department, the company did not pay applicable capital gains tax when its controlling interest changed on October 24, 2014. Coca Cola SABCO Asia Limited, based in Dubai, United Arab Emirates , which held a majority stake in Bottlers Nepal, had sold all of its stake to Ireland-based European Refreshment. The transfer of ownership had taken place through an “offshore indirect transaction”, according to the department.
In a statement, the department said the company failed to notify the transfer of ownership to relevant Nepalese government agencies, including the Large Taxpayers Office. The company did not provide details of fiscal year 2014-2015 revenues before and after the transfer of ownership and did not pay applicable taxes due to the transfer of ownership, according to the department.
According to the department, it calculated the total amount of alleged tax evasion by incorporating capital gains tax payable, fees and applicable interest under the Income Tax Act 2002. Coca Cola SABCO Asia Limited bought each share of Bottlers Nepal for 536 rupees and sold it at 3,883 rupees per share, realizing a capital gain of 4.96 billion rupees.
The Tax Investigation Authority has sought prison terms for nine former Bottlers Nepal shareholders representing CocaCola SABCO Asia Limited and eight immediate senior executives of Bottlers Nepal. The department is also seeking to recover 7.43 billion rupees from the defendants.
The investigative agency sought the prison terms pursuant to Section 23(1D) of the Revenue Leakage Investigation and Control Act under which a term of imprisonment of three to five years is imposed on convicted persons.
The department has requested prison sentences for the immediate senior executives of Bottlers Nepal in accordance with Section 23(3) of the Revenue Leakage Act under which they are subject to half of the sentence imposed on the main defendant as accomplices.
Shukla Wassan, Melvin Tan Chun Pin, Mohamed Amin Ghoneim, Gaurav Khosla, Sundeep Bajoria, Debabrata Mukherjee, Sumanta Datta, Jawahar Soali Kuppuswamy and Sanket Ray are former shareholders of Bottlers Nepal and the main defendants in the case.
Pradip Pandey, Puneet Chandrapal Varshney, Rajeev Tandon, Bharatbabu Dahal, Sumit Goyal, Ashok Kumar Mandal, Trilochan Upreti and Sanjeev Kumar Mishra have been named as accomplices in the case.
Taksar magazine published detailed investigative reports into the alleged tax evasion of Bottlers Nepal in July last year and has regularly followed the issue. Its editor, Gajendra Singh Budhathoki, told the Post it was a proud moment for him in his long career as a business journalist, as his reporting and continued monitoring helped the state take action on the case. of “major tax evasion”.
“The mainstream media has rarely followed this issue, perhaps due to commercial interests,” he said.
In February 2019, the Supreme Court ruled in favor of the government over the similar Ncell tax evasion case.
Bottlers Nepal is the second multinational soft drink company to face a tax evasion case after Pepsi bottler Varun Beverage. The department had filed a lawsuit in the Patan High Court against Varun Beverage in December 2019 for dodging tax by using fake VAT invoices.