Dhaka Club accused of VAT evasion worth Tk34cr

FT ONLINE

Revenue authorities are going to take legal action against Dhaka Club on charges of defrauding Value Added Tax (VAT) evasion worth Tk34 crore.

For the last five years, the club did not provide any kind of VAT for services, including food and sweets that they are selling outside, their bar and salon.

According to Customs, Excise and VAT Commissionerate (CEVC) (Dhaka South), the club has evaded paying VAT worth Tk34 crore.

Since the club authorities have discussed the matter with CEVC several times and failed to come up with a solution, the Commissionerate has decided to take legal action against the club. A request has been made to National Board of Revenue (NBR) in this regard so that the Commissionerate gets permission to take legal action against the club – which includes withholding its bank accounts.

CEVC (Dhaka South) Commissioner Kazi Mostafizur Rahman said: “Besides running the bar and salon, the elite club has been selling food and sweets outside its premises. However, we have not been getting any sort of VAT [from them] for these services for the last five years.

“According to our calculation, the club has evaded VAT worth Tk34 crore on goods and services in these years. Even if we discussed the matter with the club several times, they did not address the issue. We have no other choice but to take legal action against them.”

Under the provisions of Section 56 of Value Added Tax Act, 1991, legal measures will be taken against the club, he added, saying that the Commissionerate has written a letter to NBR asking for its permission in this regard.

Dhaka Club authorities have been paying VAT only for housing. However, they are not paying the state treasury VAT on other services and food they are selling, Mostafizur said.