The National Board of Revenue has found evidence that BATB evaded value-added tax (VAT) and supplementary duty in 2016 by concealing information.
The National Board of Revenue (NBR) has found evidence of value-added tax (VAT) and supplementary duty evasion of Tk 2,054 crore against British American Tobacco Bangladesh Company (BATB), the country’s largest tobacco manufacturing company. The NBR has directed its Large Taxpayers Unit (LTU-VAT) office to initiate procedures for recovering the amount.
According to sources, NBR has found evidence that BATB evaded value-added tax (VAT) and supplementary duty in 2016 by hiding information.
After unearthing this evidence by NBR, the authority instructed its Large Taxpayers Unit (LTU-VAT) to take legal action to reclaim the evaded funds in a letter on September 21.
Upon receiving this directive from the NBR, the authority sent the letter to BATB. An official of the LTU-VAT office confirmed this information to The Business Standard, requesting anonymity.
The company’s 2016 revenue evasion issue came to the fore in 2018.
At that time, the officials of the VAT department found a discrepancy between the information provided in the NBR and the information published in the audited report regarding the local consumption of the company. On the basis of that, preliminary evidence came into their hands that 2,054 crores of revenue had been evaded.
To investigate this matter thoroughly, a committee was formed comprising VAT department officials from the NBR and external experts.
In August 2021, the committee issued its final demand after the disputed demand of Tk 2,054 crore could not be substantiated, resulting in a favorable outcome for BATB.
However, the issue came up again three months ago, when the NBR summoned the file again.
Incidentally, as per NBR’s VAT Act, 1991, a decision under Section 55(3) if the file is summoned within two years of passing the decision, the earlier order is deemed to be void. Upon reevaluation, the NBR tasked a committee, led by Dr. Md. Shahidul Islam, to provide a report within 30 days.
The decision was announced by NBR after the report of the committee.
The NBR’s decision, based on the committee’s findings, has raised concerns regarding the impartiality, efficiency, and adherence to proper legal procedures in the previous ruling, which favored BATB.
The NBR order mentioned that the representatives of BATB would seek 30 day-time when they were called for the hearing (of the committee) through letters. Despite being given the opportunity to appear before the committee on September 9, BATB chose not to send any representative. Instead, the company later informed that they had filed a writ petition related to the matter in the High Court.
To find out this, attempts were made to contact Shadidul Islam, the head of the NBR committee by phone but it was not possible. Similarly, attempts to reach Shehzad Munim, the managing director of BATB, for a response about the content, also failed. An SMS was also sent to his WhatsApp asking for comments, but no response was received till the time of writing this report.
However, when contacted, LTU-VAT Commissioner Wahida Rahman Chowdhury, who issued the ‘final demand’ under Section 55(3), expressed her belief that the initial demand was not conclusively proven and that the current cancellation was unsubstantiated. She also added, “I am not an expert. The order was given based on the expert opinion of the Institute of Chartered Accountants of Bangladesh (ICAB).”
Source: TBS