Grameen Bank sued for VAT and tax fraud

According to the investigation report, the total dues amount to more than Tk 66 crore

Even though the Grameen Bank levied various fees, charges and commissions on the various phased benefits of microcredit activities, it was accused of not paying the appropriate VAT to the state.

Two cases have been brought against the Grameen Bank, one for irregularities in the provision of services subject to VAT without registration and the other for VAT fraud.

The information came to light in a recent National Board of Revenue (NBR) investigation.

According to the report of the NBR’s VAT Intelligence Directorate, it was found that Grameen Bank escaped the VAT and tax of Tk 67 crore.

Jahangir Hossen Howlader, managing director of Grameen Bank, said: “People from the VAT office visited the bank and asked officials to meet with them on Tuesday, but did not say anything about the cases.”

“The Grameen Bank is exempt from VAT as a social organization. We will have to check whether the bank has to pay VAT according to the new rules, ”he added.

Further, he said, “The folks in our accounts section can say better. We will pay VAT and taxes if necessary but this bank belongs to the poor and the pressure will ultimately be on them. “

Speaking to the Dhaka Tribune on Saturday, Moinul Khan, director general of the VAT Intelligence Department, said: “VAT detectives discovered VAT fraud of approximately Tk 66 98 60 629 while investigating the activities of the Grameen Bank. A complaint was filed against the bank under VAT law for finding evidence of VAT fraud. In addition, another irregularity case was filed against Grameen Bank for providing services subject to VAT without registration in accordance with VAT law.

However, as a social organization, the Grameen Bank has so far benefited from a VAT exemption, but when asked the reasons for these sudden allegations he said: “The overall figure of VAT evasion against them (Grameen Bank) in the investigation was even more important. Of which the evasion of excise duty of Tk400 crore was also part of it, but during the hearing they were able to convince us of that. “

“After reviewing the correct documents, we also deducted this money from the fine, however, the fees, charges and commissions charged on the provision of various services are partly VAT-eligible. It has to be handed over to the government. Another part is the withholding tax. And the amount to be paid on this VAT and this tax was fined, ”he added.

The allegations

A team from the VAT Intelligence Directorate, led by Deputy Director Nazmun Naher Kaisar, uncovered the “irregularities” after examining Grameen Bank accounts from January 2011 to December 2016.

The investigation revealed that Grameen Bank had offered banking and non-banking services under code S056 since its inception, but had not registered under the VAT law.

Organizations providing taxable goods and services must register for VAT in accordance with the law.

All banks and non-bank organizations must register regardless of their turnover.

A statutory regulatory decree stipulates that the law will be applicable to all organizations defined within the framework of banks and financial institutions defined by the law on banking companies and which offer banking and non-banking services in exchange for commissions, fees or charges. .

The VAT Intelligence Directorate indicates that 15% VAT is payable on commissions, fees and charges collected by Grameen Bank on the microcredit.

He is also supposed to pay withholding tax on his expenses in accordance with the law.

He paid 34,910 Tk of VAT on his income from 2011 to 2016, but he was supposed to pay around 30.3 crore Tk, according to the investigation report of VAT intelligence officers.

The bank will have to pay almost Tk 13.9 crore in the form of 2% interest on the VAT due.

He paid over Tk 8.5 crore at source, but he was supposed to pay around Tk 23.9 crore.

Interest on withholding tax is over Tk 7.24 crore.

According to the investigation report, the total dues amounted to over Tk 66 crore.

About Natalee Broderick

Natalee Broderick

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