The National Board of Revenue (NBR) has issued a show cause notice on Agrani Bank following the state-owned bank's failure to pay value added tax (VAT) and excise duty worth Tk 400 million to it (NBR).
The large taxpayers unit (LTU) under the VAT wing of the NBR sent a letter Sunday addressing the managing director (MD) of the bank seeking explanation from him within next fifteen days for non-payment of the revenue to the public exchequer.
In the letter, LTU commissioner Matiur Rahman said legal process will be initiated if reply to the show-cause notice is not received within the given time-frame.
Talking to the FE, Md Bodrujjaman Munshi, deputy commissioner of LTU VAT, said the unit detected the non-payment of VAT by scrutinising the financial statement of the bank between December 2017 and January 2018.
A five-member committee of the LTU visited the Agrani Bank February 18 and submitted a report on non-payment of VAT and excise duty, he added.
The VAT officials have found payable liabilities on account of excise duty and VAT of the state-owned bank is Tk 355 million and Tk 53 million respectively between December 2017 and January 2018.
"All income and tax expenditure accounts of banks are prepared for the period between January 01 and December 31 of a calendar year. The calculation of their payable VAT and excise duty is closed at the end of a calendar year," the letter said.
A new statement is opened at the beginning of a calendar year to run the activity of banks, it added.
The LTU officials said it has served the primary demand notice on the Agrani Bank as per section 55 and subsection (1) of VAT law, 1991.
In the written reply of the show-cause notice, the bank or its lawyers can apply for attending in a hearing, the letter said.
Talking to the FE, Mohammad Shams-Ul Islam, Managing Director (MD) and Chief Executive Officer (CEO) of Agrani Bank said the bank has certainly paid the VAT and excise duty, but it needs some time to find out the relevant documents to prove it.
The Agrani has a total of 942 branches across the country, but only fifteen days' time has been allowed to give reply to the show-cause notice, he said.
"It is really difficult for us to reply within such a short time," he claimed. The bank introduced online system last year, before that data was maintained under manual system, he added.
"As a state-owned entity, there is no reason for not paying the VAT and excise duty to another government entity," he said.
He, however, claimed that the state-owned bank does not have any problem with the NBR.
Agrani Bank chairman Dr Zaid Bakht said he is not aware of the issue but it may happen in case of some disputed tax demand.
