LP gas industries ready to merge if given capital gains tax exemption

LP gas industries operating under various names and brands have said they are ready to merge with each other if granted an exemption on capital gains tax.

The Nepal LP Gas Industry Association put forward this condition in a letter sent to the Nepal Oil Corporation on Thursday. The letter, signed by association general secretary Amit Agrawal, states that most industries could merge if the corporation arranges for Sections 57 and 95(A) of the Income Tax Act, 2058 not to apply.

A few days earlier, the corporation had written to all industries asking them to prepare a merger action plan in line with point 32 of its policy and programme for the current fiscal year 2083/084.

Association chair Diwan Bahadur Chand said that in return for merging, the industries want facilities similar to those given to banks, including an exemption on the tax levied on ownership transfer, including capital gains tax. According to him, if 50 percent or more of shares change hands within three years, assets must be revalued and 25 percent tax paid on the increase in value.

Chand argued that this tax would require industries to pay tens of millions of rupees. Corporation spokesperson Manoj Thakur said the corporation wants industries to merge as soon as possible to provide relief to consumers.

According to the corporation's latest price list, the retail price of LP gas at depots nationwide is Rs 2,060 per cylinder.