Large taxpayers unit of the value-added tax wing on Thursday requested the National Board of Revenue to issue an instruction promptly on the VAT rates on 4G licence, spectrum fees and charges to be collected by the government from the mobile operators during the upcoming auctions.
The LTU (VAT) also requested the revenue board to set the VAT at a reduced rate for ensuring revenue generation from the auctions for 4G/LTE (long-term evolution) licensing and spectrum allocation.
As per rules, if the VAT is collected at the existing 15 per cent rate in this case, the NBR will have to refund the money.
Bangladesh Telecommunication Regulatory Commission is set to hold the auctions on February 13 and only Grameenphone and Banglalink have confirmed their participation in the auction.
‘The government may lose its expected revenue or revenue collection may be delayed if the instruction is not issued as soon as possible,’ the letter, signed by LTU commissioner Md Matiur Rahman and sent to the NBR’s VAT policy wing, said.
The government will get around Tk 750 crore if the VAT rates on licence and spectrum fees are set at 12 per cent, it said.
Officials of the NBR said that the revenue board in 2013 slashed the rate initially to 7.5 per cent and finally to 5 per cent on 3G licence fees from 15 per cent, following pressure from the mobile operators.
They said that the mobile operators paid the VAT following the order of the NBR.
They said the net VAT receipt would be zero if the rate remains at 15 per cent.
A senior official of the NBR said the mobile operators would first pay the VAT on the fees and then would claim the amount as refund if the rate remains at 15 per cent.
The operators will not be able to get refund if the NBR sets the rate at reduced or truncated rate below 15 per cent, he said.
Earlier, on December 24, the telecom regulator also requested the revenue board to issue a statutory regulatory order clarifying its position on VAT rates on 4G licence, spectrum fees and charges and other issues.
The mobile companies did not pay Tk 169.17 crore in VAT on third instalment of 2G licence fees as there was no such order or instruction on the issue.
Rather, they filed a writ petition with the High Court, which is now sub judice.
Similarly, Robi also did not pay Tk 91.50 crore in VAT on Robi-Airtel merger fee to the BTRC in absence of any order or instruction from the VAT authority.
There is another case related to VAT registration of the BTRC that remains sub judice.
The mobile operators have not been paying VAT on some fees and charges arguing that the BTRC is not providing them VAT challan for claiming rebate.
On the other hand, the BTRC cannot issue VAT challan as it doesn’t have VAT registration.
According to the LTU letter, the government would not get any VAT from the auction if no order is issued by the NBR because of the pending cases regarding the BTRC’s VAT registration and refund system.
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