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Court dismisses eight petitions filed by WorldLink, paves way for government to collect billions in taxes

The move by the Supreme Court paves the way for the government to collect Rs 3.64 billion in royalties and rural telecommunications development fees. 

Kathmandu: The Supreme Court of Nepal has dismissed all eight writ petitions filed by Worldlink Communications, an internet service provider (ISP), challenging the government’s imposition of Rural Telecommunications Development Fee and royalty charges on maintenance fees collected by ISPs.

A division bench comprising Justices Hari Prasad Phuyal and Dr Nahakul Subedi scrapped the petitions, clearing the path for the government to collect Rs 3.64 billion in royalties and rural telecommunications development fees from various ISPs.

According to the government, WorldLink Communications still owes more than 1.96 billion to the government, while Vianet Communication’s debt has increased by more than Rs 410 million. Subisu owes Rs 330 million, Classic Tech owes Rs 310 million, Techminds owes more than Rs 300 million, Websurfer owes Rs 120 million, Mercantile owes Rs 100 million, Pokhara Internet owes Rs 40 million, and NetMax owes Rs 20 million.

There has been a dispute between the government and the Internet Service Providers (ISPs) regarding whether to classify the maintenance service provided by the ISPs as a telecommunication service. Additionally, there’s debate over whether the ISPs should pay a certain percentage of the fees collected to the Rural Telecommunication Development Fee and to the government as royalty.

The Internet Service Providers Association of Nepal (ISPAN) asserts that ISPs have consistently paid royalties and rural telecommunication development fees in accordance with the Telecommunication Act, Telecommunication Regulations, and Rural Telecommunication Development Fund Regulations. However, they argue that there’s no legal mandate to pay these fees from income generated from non-telecommunication services such as maintenance services.

The disagreement escalated to the point of causing a disruption in internet services across Nepal on May 2. This disruption occurred because Airtel, an Indian provider of bandwidth to Nepali ISPs, ceased providing bandwidth for six hours due to alleged non-payment of dues by Nepali ISPs. 

The ISPs were unable to settle their outstanding dues with Airtel because the Nepal Telecommunications Authority had not recommended foreign exchange facilities to them for a year, insisting that they first pay the Rural Telecommunication Development Fee and royalty.

Airtel resumed providing bandwidth after receiving assurances from the government and ISPs that the dues would be paid.