KATHMANDU: The Supreme Court (SC) made a decisive ruling on Sunday, scrapping all eight writ petitions filed by Worldlink Communications, an internet service provider, against the government. Justices Hari Prasad Phuyal and Dr. Nahakul Subedi, serving on a joint bench, dismissed Worldlink's claims, thereby allowing the government to proceed with collecting royalty revenue and Rural Telecommunications Development Fees (RTDF) from the company. The SC's decision is expected to significantly bolster the state's financial reserves, potentially adding billions of rupees to the treasury.
In its ruling, the SC emphasized that telecommunication service providers are obligated to pay taxes on maintenance fees, affirming the government's authority to levy taxes on such charges. This verdict also marks the dismissal of a writ petition filed by telecommunication service providers challenging the taxation of maintenance charges, thereby upholding the government's decision in this regard.
The SC's stance aligns with concerns previously raised by the Office of the Auditor General, dating back to the fiscal year 2072/073 BS, highlighting lapses in the collection of royalty revenue from internet service providers (ISPs). Additionally, a research study conducted by the Ministry of Communications and Information Technology (MoCIT) in the preceding year revealed instances of tax evasion by ISPs, including Worldlink Communications. Led by Joint Secretary Gaurav Giri, the MoCIT formed a study team to investigate tax evasion by ISPs, ultimately identifying that nine ISPs collectively owe the government Rs. 3.64 billion in royalty revenue and RTDF. Specifically, Worldlink Communications has been directed to settle a sum of Rs. 1.96 billion under these categories.
Overall, the SC's decision not only solidifies the government's authority to collect taxes from telecommunication service providers but also underscores the importance of upholding fiscal regulations to ensure fair and equitable taxation practices across the industry.
