Varun Beverages pays Rs1.6 billion bail to prevent arrest of its officials over tax fraud caseThe Department of Revenue Investigation had on Tuesday filed a case against seven current and former officials of the company for evading tax worth Rs649.6 million by producing fake VAT bills.
Varun Beverages, the bottlers for Pepsi in Nepal, has deposited Rs1.6 billion as bail amount in order to prevent the arrest of its officials charged in a fake value-added tax bill case, according to the Department of Revenue Investigation.
The department had on Tuesday filed a case against seven current and former officials of the company, including Amit Gupta, Rabikanta Jayapuriya, Rohit Kohali, Prabin Kumar Agrawal, Binod Kumar Singh and Ashok Kumar, for evading tax worth Rs649.6 million by producing fake VAT bills.
Although the department has been prosecuting fake VAT bill cases, this is the first instance of the department taking on a multinational company.
According to Dirgharaj Mainali, director general at the department, they sought Rs1.6 billion bail for seven incumbent and former officials of Varun Beverages. “A consortium of banks led by Standard Chartered Bank has provided the bank guarantee on behalf of the company,” he said.
The department had interrogated four officials, including Binod Kumar Singh and Ashok Kumar Singh, before filing the case.
“Our investigation revealed that the company used to issue cheques in line with the fake VAT bills, only for the other parties to return the amount after charging eight percent commission on the value of fake VAT bills.”
The department began investigating into fake VAT bill cases from early this year. In this period, it built tax evasion cases worth Rs 12 billion against 130 of the 981 companies under investigation.
More and more big companies are being investigated for tax-related issues in the recent years, including capital gain tax to be paid by the Ncell and decision of Tax Settlement Commission to waive tax for a large number of big companies.
Although Ncell was supposed to pay Rs21.1 billion as per the Supreme Court verdict last month, there is uncertainty over whether the company would pay the amount after International Centre for Settlement of Investment Disputes, a body under the World Bank, on December 18 gave provisional order not to enforce the government’s decision in line with the Supreme Court order.
Earlier in July 2017, the Commission for the Investigation of Abuse of Authority, in one of the largest ever corruption cases, had charged Chudamani Sharma and other two members of the Tax Settlement Commission—Lumba Dhwoj Mahat and Umesh Dhakal—with embezzling revenues worth Rs10.02 billion each while exempting enterprises of taxes in dubious ways.