NBR, DSML at odds over payment of import taxes

The customs authority and Deshbandhu Sugar Mills Limited (DSML) are at loggerheads over payment of import taxes on the essential commodity.
DSML has alleged that the fiscal measure on import of raw sugar is discriminatory and sought a tax refund of Tk 8.09 billion it paid as customs duty, regulatory duty and VAT, advance tax, advance income tax (AIT) since 2004.
On the other hand, the customs authority has alleged non-compliance of the company with the fiscal measures and pointed out its attempt to block the way of revenue collection through filing cases.
The customs bond office has recently requested the government high-ups to resolve the issue through legal procedures.
According to the customs bond commissionerate data, the company owes Tk 9.50 billion to the government until February 2021.
DSML has submitted applications to the cabinet division, industries ministry, commerce ministry, finance division, Internal Resources Division (IRD), National Board of Revenue (NBR) and customs bond commissionerate in this regard.
It has also requested to refund the amount as the state-owned sugar mills enjoy tax exemption.
"….it would be highly prejudicial and discriminatory if the NBR does not allow the same for DSML. It will be an infringement of fundamental rights protected by our constitution," DSML Managing Director Golam Rahman said in a letter to government high-ups.
Currently, the state-owned sugar mills under Bangladesh Sugar and Food Industries Corporation (BSFIC) enjoy the duty-free facility on import of sugar.
The company has claimed that it deserves the same facility as a member of BSFIC.
Talking to the FE, Mr Golam Rahman said the company stands on the same footing as other sugar mills, which are run and operated by BSFIC, and has no fundamental difference in character or status.
He said the company is paying Tk 250 million every month to the NBR as taxes as the legal disputes have not been resolved yet.
"We have demanded refund of Tk 8.09 billion on account of import taxes of raw sugar to the NBR."
He, however, said the company will comply with rules after receiving the verdict of the court and it is waiting for this.
Any of the aggrieved party has the right to file writ petitions, challenging the government's fiscal measures, he added.
Mr Golam Rahman also mentioned that sugar is one of the major essential commodities, but tax incidence is as high as 60 per cent on it.
The government should consider the contribution of the private sector as they helped maintain smooth supply chain during the Covid-19 pandemic, he said.
However, Customs Bond Commissioner (Dhaka) Md Sawkat Hossain in a recent letter to NBR alleged that the company has been providing misleading information to different government offices and lingering the process of revenue collection by filing cases.
So far, the company has filed four cases with the customs, excise and VAT appellate tribunal and four other cases with the Supreme Court and High Court Division.
"The company is wilfully creating arrears and making the customs authorities confused on this," Mr Hossain wrote.
Such practice of the company is also discouraging other similar entities on payment of taxes on a regular basis, he said.
Through analyzing the activities of the company, the customs bond office has found that the company has no intention to comply with the bonded warehouse rules.
During the period between January 1 and November 30 last year, the company imported 106,204 tonnes of raw sugar without approval or import entitlement of the customs bond commissionerate, Mr Hossain alleged.
Following alleged malpractice, the bond office has served show-cause notices, demanding Tk 2.23 billion against import.
According to the customs data, the company also owes Tk 7.26 billion against 11 demand notices of the government.
On refund claim of DSML, the customs bond commissionerate wrote that such refund claim is illegal and can be considered as an attempt to evade tax.
As per customs and VAT law, there are 15 per cent VAT at import stage along with advance tax and advance income tax on import of raw sugar.
But the company has refrained from paying the taxes mentioned above.
It is paying only customs duty and RD on import of raw sugar.
On September 9, 2020, the customs wing of NBR sent a letter to the company, urging it to pay taxes as there is no scope to offer exemption as per VAT and customs law.
The company submitted an application on June 30 in 2018, seeking exemption of import stage VAT on raw sugar.

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