TK 70.65CR VAT ON ROBI-AIRTEL MERGER FEE

BTRC initiates move to encash Robi bank guarantee

Staff Correspondent | Published: 00:00, Apr 18,2019

 
 

A file photo shows the Robi corporate office in Dhaka. Bangladesh Telecommunication Regulatory Commission has initiated a move to collect Tk 70.65 crore in value-added tax claim on merger fees from mobile phone operator Robi Axiata Limited through encashing the operator’s performance bank guarantee.— New Age photo

Bangladesh Telecommunication Regulatory Commission has initiated a move to collect Tk 70.65 crore in value-added tax claim on merger fees from mobile phone operator Robi Axiata Limited through encashing the operator’s performance bank guarantee.
As part of the move, the telecom regulator at a recent commission meeting decided to issue a letter to Robi asking the operator why the amount would not be collected by encashing its bank guarantee that the operator had submitted to the commission in November, 2016 when it merged with Airtel.
It took almost a year to complete the Robi-Airtel merger after the signing of deal between the parent companies of both the companies in January, 2016.
BTRC received around Tk 500 crore in fees and charges from the mobile phone operator.
Later, in July, 2017, the commission issued ‘Order of Merger of Licence’ to Robi upon issuance of the performance bank guarantee by the operator against the disputed VAT amount.
‘The commission will issue the notice within a few days giving the operator 10 days to reply,’ an official of the commission told New Age on Wednesday.
BTRC would encash the operator’s PBG if Robi’s explanation is found dissatisfactory, the official said.
‘We are yet to receive the letter in question regarding VAT of Robi-Airtel merger,’ Robi Axiata corporate and regulatory affairs head Shahed Alam told New Age on Wednesday.
‘We reiterate our position that we are ready to deposit the VAT if we receive required VAT receipt,’ he said.
‘It is a legitimate demand and this question should not be directed to us. The bank guarantee (BG) in question is conditional upon receipt of the required Mushok Challan by Robi,’ he said.
‘Therefore, there is no legal basis by which the bank cuarantee can be encashed,’ Shahed said.
The operator, on several occasions, has been asked to pay the VAT since the merger but the operator refrained from doing so on different grounds.
On March 5 this year, the commission in its final demand letter asked the operator to clear the VAT as the large tax payers unit of National Board of Revenue frequently requested the commission to collect the money from the operator and deposit it in the government exchequer.
The operator, however, denied paying the VAT stating that the payment of money was subject to issuance of VAT challan by BTRC.
As the commission is not a VAT-registered entity, BTRC would not be able to issue VAT challan to Robi.
On the other hand, an appeal regarding the VAT issue is pending at the Supreme Court.
As a result, Robi feels constrained to keep the matter in abeyance for the final outcome of the pending appeal before the appellate division, said the mobile operator in its reply to a previous notice issued by the commission.
After the merger, Malaysia-based Axiata holds 68.7 per cent controlling stake in the combined entity Robi, while India-based Bharti holds 25 per cent and the remaining 6.3 per cent is held by NTT DOCOMO of Japan.

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