Sadharan Bima Corporation (SBC) urged Biman Bangladesh Airlines (BBA) to pay outstanding VAT worth Tk 138 million on premiums immediately to help avert the insurer's account freeze by the revenue authority.
However, sources said, Biman management is yet to respond positively to the SBC request.
The National Board of Revenue (NBR) at a meeting last month set a deadline, December 14, for payment of the VAT on aviation-insurance premiums for the fiscal year 2012-13.
Since 1998, the SBC had not realised VAT on aviation-insurance premiums taken from BBA, the sources said.
The Biman management argues that it is a VAT-exempted organisation according to the VAT law's clause-3. And the NBR says it did not seek VAT from the BBA on the services it provides, rather it asked the SBC to pay the tax on the aviation premium it collects from the national flag carrier.
Apart from sending a letter, managing director of SBC Syed Shahriyar Ahsan met BBA managing director A M Mosaddique Ahmed recently to persuade him into making the payment.
The SBC chief was told that he would be given update about the issue after consulting the BBA legal adviser.
Officials said the BBA has two cases on VAT issues pending with courts. BBA lawyers were of the opinion that this dispute with the SBC would also be settled through court.
"The SBC is collector of VAT. If you do not pay, there is no scope of paying it from our own pocket," Mr Ahsan told the FE in reply to a query.
He sees some legal complications about NBR's VAT collection on aviation- insurance premium.
Mr Ahsan quoted the BBA managing director as having said that the issue would be placed before Biman board for a decision as to whether or not the national flag carrier would pay the VAT.
He told the FE that Biman authorities had not informed him of any development on this score until Tuesday.
"I met the Biman managing director and explained the matter before sending the letter. But, until now, I have not been given any update," said Mr Ahsan.
Earlier in a meeting at the NBR, a representative of the BBA had sought VAT waiver on their insurance premiums. The SBC representative also requested the NBR not to freeze the bank account of the corporation.
At the meeting the SBC was told that under the existing rules the corporation is bound to make the VAT payment by colleting from its clients.
The Biman managing director could not be reached over telephone for a comment despite several attempts.
syful-islam@outlook.com
