Telcos lose tribunal battle over Tk 2,048cr SIM replacement tax

NBR in 2nd phase demands Tk 883cr from four mobile cos

Jasim Uddin | Published: 21:50, Jul 05,2017


A file photo shows Grameenphone’s headquarters in Dhaka. The National Board of Revenue has demanded Tk 883.32 crore from four mobile phone operators alleging that they had dodged the amount as SIM replacement tax between July 2012 and June 2015. — New Age photo

The National Board of Revenue has demanded Tk 883.32 crore from four mobile phone operators alleging that they had dodged the amount as SIM replacement tax between July 2012 and June 2015.
The operators — Grameenphone, Robi, Banglalink and Airtel — also last month lost a legal battle at NBR’s VAT appellate tribunal regarding previous dispute over SIM replacement tax worth Tk 2,048 crore, officials said.
The Large Taxpayers Unit (value-added tax) on June 29 issued the demand notices after second phase scrutiny of the authenticity of SIM replacement data provided by the operators and asked them to pay the amount to government exchequer within 15 days, officials said.
In first phase, the LTU (VAT) in 2012 conducted an audit on SIMs replaced by the operators between July 2007 and December 2011 and demanded Tk 2,048 excluding interest amount as SIM replacement tax from the companies saying that they dodged the amount in the replacement process.
The initial demand including 2 per cent monthly interest was Tk 3,010.99 crore.
In the process, according to the NBR report, the operators dodged the amount in SIM replacement tax through selling old SIMs to new clients but declaring replacement to original subscribers as there was no tax on replacement till June 2014 while SIM tax on new SIM was Tk 300.
Currently, tax on both new and replacement SIMs is Tk 100.
The operators have always been denying the allegations and filed case at VAT Appellate Tribunal of the NBR against the demand.
The tribunal on June 22 gave its verdict in favour of the NBR and asked the operators to pay Tk 2,048 crore.
The operators will have 90 days for complying with the verdict or challenging the verdict at Supreme Court.
Officials of the LTU said that they had already issued a notice to the Supreme Court so that the operators cannot receive stay order unilaterally against the verdict from the court keeping the VAT office unnoticed.
LTU commissioner Md Matiur Rahman on Wednesday told New Age that they would implement the tribunal’s verdict following legal process after expiry of the time-frame.
In addition to the disputed amount, the operators will also have to pay penalty and interest amount at the rate of 2 per cent per month for delay in payment, he said.
In the second phase, officials said that the LTU (VAT) found the evasion while scrutinising the VAT returns of the companies.
A tripartite committee of the LTU (VAT) formed in early March consists of representatives from LTU (VAT), Bangladesh Telecommunication Regulatory Commission and the Association of Mobile Telephone Operators of Bangladesh held several meetings to verify the authenticity of the data related to SIM replacement.
In the meetings, the representatives of the operators in the committee could not prove the authenticity of their claims of SIMs which they showed in their returns as replacement SIMs during the period, they added.
Of the amount, GP dodged the highest amount of Tk 378.95 crore, Robi Tk 285.20 crore, Banglalink Tk 168.91 crore and Airtel evaded Tk 50.26 crore in the period through selling new SIMs which they claimed as replacement.
AMTOB secretary general TIM Nurul Kabir denied making any comment over tribunal’s verdict.
He claimed that the previous demand was made on fictitious base.
Regarding the new demand, he said that the NBR could have verified the authenticity of SIM replacement using the BTRC’s database where all SIMs are biometrically verified.
He said that the new demand would throw a negative message to future investors and would impede future investment in the sector.
The dispute could have been solved through administrative process in line with the finance ministry’s directives made in 2015, he said. 

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