Green Delta Insurance in a rejoinder issued on Tuesday claimed that a news report, headlined, 'Taxmen chase eight insurers for Tk 1.1 billion' and published in The Financial Express on September 26, 2017 was 'not totally true'.
The company said that there is no legal provision to deduct VAT on insurance agents' commission and there exists a stay order of the High Court on an earlier demand for VAT worth Tk 55.1 million on account of insurance agents' commission.
As there is a stay order of HC, there is no legal basis to issue a fresh demand notice claiming VAT on the same issue.
The company also claimed that it was yet to receive any such demand notice from the LTU relating to VAT claim worth Tk 308.8 million on account of insurance agents' commission and re-insurance premium.
On re-insurance premium, the company said VAT on re-insurance commission is not legally applicable as per VAT law.
FE's Reply: The report, in question, was prepared on the basis of information and written documents available with the VAT authority. As per documents, the LTU served the notice on eight large insurers including Green Delta on September 26, 2017.
The NBR admitted that the HC had issued a stay order on the VAT claim worth Tk 55.1 million for the year of 2014. However, there is no HC stay order on the recent demand for VAT worth Tk 175.9 million as insurance agents commission and Tk 132.9 million as re-insurance commission for the 2015 and 2016 calendar year respectively.
As per Finance Act, the government has imposed VAT on insurance agent commission and re-insurance premium of the insurance companies. The government did not exempt the VAT for the insurers.
