Checking VAT Evasion

NBR asks field offices to ensure traders use e-BINs

Staff Correspondent | Published: 23:36, May 06,2021


Many businesses have been running their businesses, including trade, import and export, illegally with invalid business identification numbers (BIN) that has increased the risk of VAT evasion and other irregularities, officials said.

They said that businesses had even been filing monthly VAT returns using the invalid BINs by taking advantage of the option of manual VAT returns submission.

The issue has also been brought to the attention of the National Board of Revenue, prompting it to ask field-level VAT offices to take steps against the practice and ensure the use of valid BINs by traders for running businesses.

The revenue board on November 30, 2019 made the old BINs comprising of nine digits and 11 digits invalid and made the use of the 13-digit online BINs, also known as e-BINs, mandatory for all types of business activities.

The NBR’s VAT wing on Thursday issued a letter to its all field-level VAT offices regarding the matter.

It also asked the offices to furnish a report within 15 days about what steps, including issuance of new BINs, they took against businesses which were using the old BINs to run their businesses.

According to the Value-Added Tax and Supplementary Duty Act-2012, the BIN or VAT registration number must contain 13 digits.

Businesses which have BINs comprising of nine and 11 digits must re-register with the VAT online system to obtain the 13-digit BINs.

Conducting business activities, including import and export, using the old BINs is illegal, said the NBR letter signed by NBR second secretary (VAT monitoring, statistics and coordination) MM Kabirul Islam.

The revenue board came to know that businesses were filing VAT returns manually using the old BINs and field-level VAT officials were also accepting them, the letter stated.

Officials said that using invalid BINs increased the risks of VAT evasion as the BINs were not registered with the VAT online system.

It is also difficult to track down the traders who file VAT returns using invalid BINs if they use fake addresses, they said.

There have also been cases where the traders took release of their imported goods using the invalid BINs, they added.

A 13-digit e-BIN is mandatory for opening letters of credit for conducting import and export, participating in tenders, getting bank loans and carrying out regular business activities where e-BINs are required.

So far, around 2.53 lakh traders have obtained e-BINs under the VAT online system.

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