The Financial Express

NBR warns Dhaka Club of freezing bank accounts

| Updated: March 03, 2021 14:38:08

Photo: Dhaka Club Limited website. Photo: Dhaka Club Limited website.

The National Board of Revenue (NBR) has asked the posh Dhaka Club Limited (DCL) to pay the arrear value added tax (VAT) worth Tk 336 million immediately — warning otherwise its bank accounts would be frozen.

The Customs Excise and VAT Commissionerate, Dhaka (South) zone recently issued two separate letters to the DCL authority to pay the arrear VAT that the NBR officials detected by auditing the club's VAT returns in 2017.

The Commissionerate could not realise the VAT in the last four years despite extending the deadline several times, officials said.

The letters, signed by additional commissioner of the zone Promila Sarker, made it clear that realisation of the government's revenue is a legal step, and there is no scope to linger the procedure.

The VAT authority demanded the amount through issuing two demand notices claiming Tk 70 million and Tk 266 million, rejecting the DCL's applications to extend time for another two months.

The club authority placed an application on January 20, seeking two months' time to pay the demanded VAT. However, the VAT zone extended the time for 15 days, following the application, according to the officials.

It has been found that the DCL sought such time extension on five occasions since September 26, 2017, the letter said.

The NBR detected the alleged VAT evasion in 2017 and sent show-cause letter to the club authority on July 7, 2017, for the first time.

Later, it sent nine letters to the DCL asking to pay the arrear VAT, but the club authority lingered the process by seeking time extensions, said officials concerned.

On December 24, 2018, the VAT authorities sent final demand notice, rejecting applications of the club to review/recalculate the VAT demand worth Tk 266 million.

The zone said the DCL should pay the amount within 15 days – warning otherwise it would be forced to freeze the club's bank accounts and take legal actions under Section 56 of the VAT law.

The officials said the club authority also attended the hearing, and as per their request the NBR waived the interest due to delay in paying the VAT.

The VAT zone also obtained approval of the NBR to go for taking legal proceedings against the club, according to a letter of the zone – sent to the DCL management.

Officials said the president and general secretary of the high-profile club met the Dhaka South zone commissioner with the request of not freezing their bank accounts.

Talking to the FE, Syed Mushfequr Rahman, secretary general of the BCS Customs and VAT Association, said they are scrutinising VAT payment data of the posh clubs to check VAT evasion.

The clubs collect VAT from their members on different services, but in many cases refrain from depositing the money to the public exchequer, said Mr Rahman, who is the VAT commissioner of Dhaka West zone.

Divisional officer and assistant commissioner Zakir Hossain Chowdhury said they are waiting for the NBR's instruction to freeze the DCL accounts.

Despite several attempts, the FE correspondent could not reach the club's spokesperson for comment.


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