The NBR has seized the documents of Alpha Composite Towels Limited, and has issued a demand notice for the payment of about Tk 4 crore
A composite towel manufacturer has been fined Tk 3.77 crore for taking the VAT waiver facility from the National Board of Revenue (NBR) by submitting a false challan against its products sold in the local market since 2010.
The NBR has seized the documents of Alpha Composite Towels Limited, and has issued a demand notice for the payment of about Tk 4 crore because the company evaded VAT.
Although the firm has been evading VAT since 2010, the Customs, Excise and VAT Commissionerate, Dhaka West discovered the matter only recently.
Dr Moinul Khan, commissioner of Dhaka West VAT Commissionerate said that an NBR team raided the factory of Alpha Composite Towels Ltd on a tip-off, and seized its VAT challan.
"The firm has been evading VAT for a long in the name of export. Now, a primary demand notice has been issued against the firm," he added.
"If the demanded amount of VAT is not deposited to the state exchequer within the stipulated timeframe, the NBR will take legal action against the company, including seizing of goods," said Moinul.
As per the complaint, Alpha Towel mainly produces terry towels. The firm, in its balance sheet, mentioned that it exported 7167 metric tons of goods (terry towels) from 2010 to 2016. It also issued challan sheets showing that zero VAT is applicable against the exported items.
But the NBR's preventive team that visited the factory found exactly the opposite. Examining the seized VAT challan 5, it found that the goods were not exported at all. These goods were shifted to an associate firm of Alpha Composite, and later sold in the local market.
Dhaka West Commissionerate said, the firm had mentioned in the VAT challan that zero VAT was applicable against export items, but it failed to provide any proof to support its claim. The authorities of the firm were given an opportunity of a hearing, but they failed to provide any proof.
In this context, a final demand notice worth Tk 3.77 crore was issued against the firm on Thursday as per section 55(3) of the VAT Act, 1991. The firm has been given a deadline to deposit the money to the government exchequer within 7 working days.
Dhaka West VAT Commissionerate also said that interest of 2 percent annually on each year's VAT will be applicable from the year 2010.