KATHMANDU: A case of tax evasion has been filed against the multinational company Coca-Cola. The Department of Revenue Investigation has filed a case in the Patan High Court on Friday alleging tax evasion amounting to Rs 3.71 billion.
According to a press release issued by the Department, it has added NRs. 3.71 billion more as fine.
While purchase and sale of Coca-Cola’s property, the Company ignored Nepal’s existing laws and didn’t pay the capital gain tax in Nepal. Dubai-based company Coca-Cola SABCO Asia, which owns a majority stake in Nepal-based Bottlers Nepal Limited, sold 100 percent of its shares to Coca-Cola SABCO’s European Refreshment in Ireland on October 24, 2014.
While selling the shares owned by Bottlers Nepal Limited, the company has committed tax evasion without informing the concerned body including the Big Taxpayer’s Office, according to the Department.
Bottlers Nepal Limited, located in Balaju Industrial Area, Kathmandu Metropolitan City-16, has been made the main defendant in the case filed by the department. The department has filed a lawsuit against the company’s shareholders in the board of directors of Bottlers Nepal, representing Coca-Cola Southwest Holding Limited in Dubai, UAE, and Coca-Cola SABCO Asia.
Among those who have filed the case are company Chairman Shukla Wassan, directors Melvin Tan Chun Pin, Mohamed Amin Ghoneim, Gaurav Khosla, Sundeep Bajoria, Debabrata Mukherjee, Sumanta Datta, Jawahar Solai Kuppuswamy and Sanket Ray. The department has also named the managing director of the company and the persons in charge of financial transactions and audit as the main defendants.
Cases have also been filed against Managing Directors of Bottlers Nepal Pradip Pandey and Puneet Chandrapal Varshney, Finance Managers Rajeev Tandon, Bharat Babu Dahal and Sumit Goyal. Similarly, Finance Controller Ashok Kumar Mandal, Board Director Dr Trilochan Upreti and Chartered Accountant Sanjiv Kumar Mishra have also been named as defendants.
The Department had started an investigation on the suspicion of tax evasion by selling a company affiliated with Coca-Cola producer Bottlers Nepal Limited abroad. After the transaction was made without informing the government bodies of Nepal, a revenue investigation under the Prime Minister’s Office was started.
Foreign investors have 76 percent share in Bottlers Nepal Limited, 22 percent share belongs to Gorkha Brewery under Khetan Group based in Nepal and 2 percent share belongs to general public. The department has filed a case alleging that 25 percent capital gains tax has been cheated as per Nepal’s Income Tax Act, 2058 BS by selling 76 percent of the shares to a foreign company.
The department filed the case on Friday after a long study and investigation. Economic journalist Gajendra Budhathoki had initially revealed about this tax fraud.
Bottlers Nepal (Terai) is also a sister company of Bottlers Nepal, in which Bottlers Nepal has 91 percent share. The remaining 9 percent shares belong to the general public. Bottlers Nepal, established in 1973, has been trading Coca-Cola and other products in the Nepali market for 41 years by setting up a plant in Balaju Industrial Area.
In 1987 another company Bottlers Nepal (Terai) was set up and production was started from Bharatpur, Chitwan.
