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Three large taxpayers need to pay Tk 2.12b in VAT, excise duty

LTU seeks explanation for Tk 54.83b VAT exemption for Premier Bank

FE Report | January 31, 2018 00:00:00

The Large Taxpayers Unit (LTU) under VAT wing Monday and Tuesday issued separate demand notices to three large taxpayers to pay VAT and excise duty worth Tk 2.12 billion.

The notices were served on state-owned Dhaka WASA, private commercial bank Prime Bank Ltd and mobile operator Grameenphone Ltd.

Of them, LTU on Monday issued final demand notices to Dhaka Wasa and Grameenphone. It also served primary demand notice on Prime Bank.

Besides, the unit also sought explanation with valid documents for Tk 54.83 billion VAT exemption availed or claimed by Premier Bank within next three working days.

In the final demand notice, LTU sought Tk 1.76 billion VAT deducted at source and unpaid VAT from WASA for the fiscal years 2013-14 and 2014-2015.

The unit collected audit reports on those two FYs of the authority from its website and detected unpaid VAT through cross-checking the data with its VAT returns, official said.

The unit issued primary demand notices and held hearing with two representatives of WASA on July 07, 2017.

The representatives said they paid Tk 2.64 billion VAT in the two FYs against its collection of Tk 2.19 billion.

The demand notice was issued as no documents were submitted in support of their claim on VAT payment, the notice said.

Dhaka Water Supply and Sewerage Authority (WASA) Managing Director Taqsem A Khan said WASA doesn't have any arrears or unpaid VAT.

"VAT that consumers pay to WASA directly goes to the government exchequer on real time basis," he said.

In case of any demand placed by the VAT authority, WASA would discuss the issue with them to resolve it, he added.

He, however, said the authority is yet to receive the demand notice.

The LTU also sent final demand notice to Grameephone seeking Tk 70 million for the January-June period of 2017 on account of VAT on space and establishment rent.

"The company has spent Tk 480 million as space rent. VAT is applicable at a rate of 15 per cent on space rent above 150 sq ft," the notice said.

Earlier, mobile operators, including GP, Robi, Bangla Link and Airtel filed separate writ petitions with the appellate tribunal challenging demands made by VAT wing.

However, the appellate division issued its order on May 8, 2017 in favour of the government.

Responding to the FE's query, GP in a statement said, "We have received the notice from NBR. Currently, we are assessing the notice. So, we cannot now comment on this matter."

The LTU also sent a letter to Premier Bank seeking explanation of its claimed VAT exemption for the period between January 2013 and October 2017.

VAT officials said the company filed a case with the High Court (HC) against the NBR letter on explanation of the amount, but it was vacated by the appellate division.

In the letter, LTU again requested the bank to furnish valid documents in favour of its claimed VAT exemption within next three days.

It said the unit would take legal action in case of failure in providing the documents.

Premier Bank head of accounts Moshfeque Alam Khan said legal adviser of the bank will deal with the issue and try to resolve through mutual discussions.

In two primary demand notices issued to Prime Bank, LTU sought Tk 235 million in excise duty and Tk 52 million in VAT arrears.

The unit requested the bank to respond within next 15 days on its demand (show cause notice) of VAT worth Tk 52 million.

The VAT officials have found unpaid revenue after scrutinising its records and consolidated statement affairs.

When contacted, a senior Prime Bank official told the FE that the bank had not yet received the demand notice and they had time until next month (February) to pay the claimed excise duty.

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