May 20: The Supreme Court has issued an interim order asking the government not to fine taxpayers for the delay in submission of VAT and tax within the stipulated deadline taking into consideration the enforcement of prohibitory order in most parts of the country.

The interim order in the name of the government has brought relief to the private sector affected by the prohibitory order aimed at curbing the Covid-19 outbreak.

Hearing on a writ petition filed by advocate Srijana Adhikari, a single bench of Justice Meera Khadka on Wednesday, May 19, ordered the government not to fine private companies failing to fill the value-added tax details and tax on time due to the lockdown.

"Do not collect fines from the companies failing to fill the value-added tax statement and tax on time due to the lockdown," the order states.  

“Necessary arrangements should be made to pay the taxes within 30 days after the lockdown is lifted,"  the order added. 

The order has also asked the finance ministry to submit a written reply in this regard within 15 days. 

Adhikari had filed a writ petition against the Inland Revenue Department alleging the office for imposing the fine without providing sufficient information regarding tax submission on the website.

Last year, the government had allocated a time limit for the private sector to submit VAT and tax during the lockdown, which is not the case during the ongoing prohibitory order. Most districts in Nepal are currently under prohibitory orders since late April.

However, the Inland Revenue Department has been urging the taxpayers to submit the details including tax payment through various means.

The private sector had demanded the government to extend the period for submitting tax details and to extend the tax payment period, citing the ongoing lockdown and the employees suffering from Covid-19.  However, the government has intensified tax collection, saying that it is in no hurry to make a decision. 

Entrepreneurs say that the private sector is relieved from the court order. Chairman of Nepal Chamber of Commerce Rajendra Malla said that the recent monetary policy and Supreme Court order have given some respite to the private sector.

"We, the industrialists and businessmen, are the citizens of this country and we know that we have to abide by the law. But given the difficult situation, we asked the government to give us time to pay taxes and submit details. However, the governmrnt did not show any  concern," said Malla.

The order of the Supreme Court and the provision of the monetary policy should be implemented in a way to benefit the private sector, added Malla.