ECAN’s tax evasion confirmed by Revenue Tribunal

KATHMANDU: The Revenue Tribunal has confirmed allegations of revenue fraud against the Educational Consultancy Association of Nepal (ECAN).

Upholding the decisions of both the Internal Revenue Office in Battisputali and the Revenue Investigation Department, the Tribunal, led by Chairperson Ramesh Dhakal and Accounting Member Basudev Khanal, found ECAN guilty.

Initially, the Battisputali office concluded that ECAN had committed revenue evasion over six fiscal years, spanning from the financial year 2071-2072 to 2076-077. On the 25th of Magh, 2077, the Revenue Office determined ECAN’s evasion during these fiscal periods. Despite the office’s ruling, ECAN opted to appeal to higher authorities without remitting the owed taxes.

Despite ECAN’s appeal to the Revenue Investigation Department against the Internal Revenue Office’s decision, the latter also upheld the guilt of ECAN in the matter of revenue fraud.

The department endorsed the Revenue Office’s decision on Mangsir 20, 2078. However, ICAN contested this ruling by appealing to the Revenue Tribunal.

On Mangsir 24, 2078, ICAN filed an application with the judiciary seeking to overturn the decisions made by both the Revenue Department and the Revenue Office.

Upon the completion of two years, the tribunal rendered a verdict against ECAN. Although the complete text of the judicial decision is not yet finalized, it is recorded in the opinion book that the rulings issued by the Internal Revenue Office in Battisputali on Magh 25, 2077, and by the Revenue Investigation Department on Mangsir 20, 2078, are deemed valid. As a result, the taxpayer’s appeal could not be upheld.

ECAN was discovered to have solicited an excessive quantity of funds from educational consultants. When the Revenue Investigation Office looked into the matter, ECAN stated that it had charged membership fees to the consultants.

The revenue office officer stated, ‘The amount he had collected. It was not clear that it was only for members. We saw ample reason to question ECAN’s role. While investigating, it was determined that tax evasion had occurred.

However, even after the confirmation of tax evasion by the Revenue Department, ECAN claimed that the disputed tax had not been deposited. Therefore, ECAN had deposited 25 percent of the disputed tax amount and approached the Revenue Investigation Department. The Revenue Office Battisputali had previously halted around 1.5 million rupees of disputed tax evasion identified by ECAN.

According to the law, if dissatisfied with the revenue office’s judgment, you may appeal by depositing 25% of the amount due. ECAN also made an application to the Revenue Department under the same provision. However, the revenue department likewise concluded that ECAN had defrauded the government.

ECAN appealed the Revenue Department’s judgment and appeared before the Revenue Tribunal on a 50% bail. The Tribunal has also determined that ICAN defrauded the revenue, and the revenue office has launched steps to collect it.

Sources informed that the revenue office has asked to deposit the amount to be paid immediately. Now there is a provision that ECAN can file an application to the Supreme Court for a hearing against the decision of the Revenue Tribunal. But only after the Supreme Court decides whether to re-hear it or not, it will be certain that the petition will not be registered in the Supreme Court. For that, we have to wait for the full text of the Tribunal decision.

Sources of the Revenue Office said that an organization like ECAN has not yet been registered for VAT and other activities for tax evasion have also been observed.