NBR to ask 5 luxury hotels to pay Tk 100cr in SD on alcohol sales, floor shows

Staff Correspondent | Published: 22:36, Aug 26,2017 | Updated: 00:41, Aug 27,2017

 
 

A file photo shows the front view of Sheraton Hotel which later turned into Ruposhi Bangla Hotel and then InterContinental Hotel. The National Board of Revenue is likely to ask five luxury hotels to pay around Tk 100 crore in supplementary duty on alcohol sales and floor shows as the hotels lost a legal battle in this connection in the country’s apex court. — New Age photo

The National Board of Revenue is likely to ask five luxury hotels to pay around Tk 100 crore in supplementary duty on alcohol sales and floor shows as the hotels lost a legal battle in this connection in the country’s apex court.
The large taxpayers unit of value-added tax wing of the NBR may issue separate notices to the hotels within a day or two asking them to pay the amount immediately to the government exchequer, officials said.
The hotels — Pan Pacific Sonargaon, Sheraton (now InterContinental), Westin, Radisson Blu and Dhaka Regency Hotel and Resorts — last month lost the cases they filed with the Appellate Division of the Supreme Court against the LTU (VAT)’s demand for Tk 54 crore in SD.
Officials said that the revenue board in 2008 imposed 10 per cent supplementary duty on supply of alcoholic beverages along with accommodation and food, and organising any kind of floor show by a hotel.
Hotels have to pay the SD if they organise such programme even for only one day in a year but the hotel authorities refrained from paying the tax.
The LTU detected the evasion of SD worth Tk 54 crore up to 2012 and issued demand notices to the hotels. The authorities of the hotels filed separate writ petitions with the High Court against the notices and the court gave verdict in favour of the LTU.
Then, the hotel owners went to the Appellate Division which also upheld the verdict of the High Court Division.
A senior official of the LTU said that some hotels started to pay the SD since 2012 after they (LTU) detected the evasion.
But the total payable amount of SD will cross Tk 100 crore including some hotels’ unpaid SD in the period after 2012, he said.
The hotels will also have to pay interest amount at the rate of 2 per cent on dues, he said.
‘The LTU may issue the notices tomorrow [Sunday] asking the hotels to pay the amount immediately,’ he said.
The LTU will issue notices for the second time if the amount is not paid within seven days of the issuance of the first notice.
The hotels may face bank account freeze if they disobey the second notices.
Officials said the SD is applicable to all types of hotels, motels, resorts and restaurants which serve alcohol and arrange floor shows.
Most of the luxury hotels, motels, resorts and restaurants particularly in tourists-prone areas have such services, they said adding that many of those evaded the SD as collection of the tax from the services was not organised.
Field-level VAT offices may also claim the SD following the verdict of the apex court, they added. 

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