The National Board of Revenue has claimed Tk 2,473 crore in value-added tax from three subsidiaries of the Bangladesh Petroleum Corporation, alleging that the companies evaded the VAT on fuel supply to foreign airlines and sales on the domestic market.
Chattogram Customs, VAT and Excise Commissionerate has recently raised the demand along with serving show-cause notices on Padma Oil Company Ltd, Meghna Petroleum Ltd and Jamuna Oil Company Ltd, three subsidiaries of the BPC, seeking explanation on the demand.
Of the amount, the VAT commissionerate claimed Tk 1,952 crore in VAT from Padma, Tk 311 crore in VAT from Meghna and Tk 210 crore in VAT from Jamuna, officials said.
They said that the companies evaded the amount between the fiscal year 2015 and 2019.
The VAT office has given fifteen days the companies to explain their position, they said.
The companies, however, sought additional time to give their explanation.
According to the VAT officials, the VAT office found no documents against fuel supply to foreign airlines by Padma Oil.
According to the law, fuel supply to foreign airlines is considered as export and free from payment of VAT on condition that the foreign currency is repatriated.
As Padma failed to show documents related to foreign currency repatriation, the supply will not be recognised as export and VAT will be applicable to the supply, they said.
The VAT office claimed VAT worth Tk 1,880 crore from Padma on fuel supply to foreign airlines, they added.
It also demanded Tk 30 crore in VAT from Padma on differences between the fuel price at import stage and selling price at the local stage, and claimed another Tk 42 crore in unpaid VAT deducted at source on purchase.
Meghna Petroleum and Jamuna Oil allegedly evaded the amounts on differences between the import price and selling price, the officials added.
Local sales price was higher than the import price and the companies paid VAT on import price.
The Chattogram VAT commissionerate has already held several meetings with the companies on the issues but failed to resolve those.
The final demand notice will be served based on explanations the companies provide.
The VAT authorities often engage dispute with the subsidiaries of the BPC on VAT issues.
There were also allegations that the companies sold furnace oil to the Bangladesh Power Development Board with imposing VAT though they imported the product under VAT-free scheme.
Earlier, the NBR realised Tk 1,388 crore in VAT from the BPC for the period up to FY2014.
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