NBR detects Tk 26b VAT evasion by BPC, cos under it

Authorities are upbeat about the prospect of recouping the initial revenue shortfall as taxmen discovered, in their current search for defaults, a stash of unpaid VAT with the state-owned oil marketing companies.    
Officials said the National Board of Revenue (NBR) identified Tk 26 billion arrears in Value Added Tax (VAT) pending with the Bangladesh Petroleum Corporation (BPC) and the companies under its control against the marketing and supply of fuel oils.
The Chittagong VAT commissionerate of the NBR recently found out the large amount of arrears in value tax lying with four oil companies under BPC.
Padma Oil Company, Meghna Petroleum, Jamuna Oil and Standard Asiatic Oil Company Limited owe an aggregate amount of Tk 20.18 billion to the exchequer.
In an analysis, VAT officials found that the companies paid Tk 5.44 for per-litre diesel as VAT and Advance Trade VAT (ATV) after collecting Tk 9.68 from the consumers in 2013-14. Also, the companies paid Tk 6.91 as VAT including ATV in 2014-15.
The VAT officials, during careful calculations, detected that the companies had paid Tk 4.24 and Tk 2.77 less as VAT respectively in FY '14 and FY '15.
The arrears were found having accumulated in the period between July 2013 and June 2015.
The Chittagong commissionerate found that Padma, Meghna and Jamuna oil companies paid 6.03 billion less VAT at business stage on supply of fuel oils.
To resolve the disputes, the NBR held an inter-ministerial meeting last week with the Bangladesh Petroleum Corporation (BPC), the ministry of energy and VAT officials concerned.
Official sources said the BPC agreed to pay VAT arrears worth Tk 6.03 billion within this week.
However, both the parties will discuss further the process of payment of Tk 20.18 billion in VAT arrears, they said.
Of the due amount, Padma Oil owes Tk 6.03 billion, Meghna Petroleum Tk 7.36 billion, Jamuna Oil Tk 6.27 billion and Standard Asiatic Oil company Tk 498 million.
VAT officials said they identified the large amount of arrears through scrutinizing data on imported and refined petroleum.
In a circular on January 31, 2013, the ministry of energy and mineral resources fixed base-price of VAT, VAT at business stage and total payable VAT for imported and refined petroleum oils.
According to the circular, total VAT on petroleum has been collected at Tk 9.68 for per litre of diesel from the consumers. The VAT officials found out that the paid VAT was partially deposited with the public exchequer by the oil companies.
Talking to the FE, Syed Golam Kibria, customs, excise and VAT commissionerate, Chittagong, said the VAT officials will sit with the BPC again on Monday to settle the issue.
"There is no ambiguity but BPC wants to make some technical issues clear," he said.   
On the Tk 6.03 billion dues, he said the petroleum corporation will pay the amount by this week.
Officials said the big chuck of arrears in VAT raised hope among the taxmen about offsetting the shortfall on revenue collection in the first quarter of the current fiscal (2015-16).
In 2012, the Chittagong VAT commissionerate collected Tk 11.00 billion VAT arrears from BPC.