The National Board of Revenue has decided to adjust the outstanding value-added tax worth Tk 3,564 crore from Bangladesh Petroleum Corporation and its four oil marketing companies through book adjustment method being failed to realise the amount from the state-owned entity.
The revenue board in a meeting held on March 13 at its conference room instructed the Chittagong Customs Excise and VAT Commissionerate to place a proposal to the tax authority in this connection.
VAT officials said that they made the decision to meet the revenue collection target for the current fiscal year 2017-2018 as the NBR was facing huge shortfall in collection target.
Chittagong VAT commissionerate could not collect the dues from the BPC and its four subsidiaries— Padma Oil Company, Meghna Petroleum, Jamuna Oil and Standard Asiatic Oil Company—despite its repeated efforts, they said.
Earlier I 2015, the commissionerate detected the VAT evasion by the BPC and its oil companies through paying VAT and advance trade VAT at lower rate than collected from consumers for supply fuel oils, particularly diesel, in FY 2014 and FY 2015.
They said that the commissionerate had already forwarded a proposal to NBR for taking required steps to adjust the amount through the method.
In the book adjustment process, there will be no actual transaction between the two entities as BPC will not pay the dues to the NBR. But, tax authority will show the amount in its revenue data as receipts with consent of the finance ministry.
Though the proposed book adjustment would not create any difference in actual revenue collection figure, the step was important for implementation of the provision of the law, they added.
In a letter to the NBR, Chittagong commissionerate commissioner Syed Golam Kibria said collection of the amount through book adjustment would help the office to meet its revenue collection target.
It will also contribute in achieving the overall target of the NBR, he said.
A high official said that BPC was supposed to pay the VAT in the last fiscal year 2016-2017 as per finance ministry’s direction.
Finance ministry directed the BPC to pay the amount terming that the financial health of the corporation was better at that time due to downslide in fuel prices on the international market than previous years.
‘BPC should pay the VAT as they collected the amount from the consumers, but the corporation has yet to deposit it to the government exchequer,’ he said.
Even, there were no sign that the state-owned entity would pay the VAT. So, the NBR had planned to to realise the arrears through book adjustment, he said.
Now, the NBR will place the proposal to finance ministry, and power and energy ministry seeking settlement of the dispute through the process, he added.
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