National Board of Revenue has launched a massive raid to fast food shops, hotels and restaurants to rein in value added tax evasions.
The effort comes after receiving complaints from consumers that the shops were dodging VAT. VAT is now the government’s second biggest source of revenue earning.
The NBR targets to collect Tk1,76,370 crore revenue, including Tk64,262 crore as VAT, this fiscal year.
“Consumers are now very conscious about the amount of money they pay to shops as VAT. They check if the money is being deposited to the government exchequer or not,” said an NBR official.
He said the consumers file complaints either directly to the NBR field offices or posting VAT evasion information on the NBR’s Facebook pages.
“Such information by consumers helps the NBR collect a huge amount of revenues left unutilised for years.”
In July 2009, the NBR made it mandatory for 11 types of business to install and use ECR machine and Point of Sales (POS) software to boost VAT collection.
The businesses include hotels, restaurants, sweetmeat shops, furniture outlets, beauty parlours, community centres, jewellers, all shops located at mega shopping malls in the metropolis, departmental stores, general stores, big and medium-size wholesalers and retailers at the metropolis.
However, a huge number of shops and food centres still do not use e-register for transactions with their customers, according to the NBR data.
NBR officials said many shopkeepers kept the ECR system ineffective while many were running businesses with taking any VAT registration known as Business Identification Number (BIN). Many traders also using 10-digit BIN although that is supposed to be 11-digit.
An official said as many people are not that much conscious, dishonest traders take the chance and give customers manual receipts with 10-digit BIN.
“Through this way, many shops are collecting VAT from the consumers, but not depositing the money to the government exchequer.”
Customs, Excise and VAT Commissionerate Dhaka (north) recently raided the Istanbul Foods Limited in Gulshan and collected a sum Tk18 lakh as VAT which was dodged. It also fined the outlet Tk18 lakh.
Coentro restaurant in Dhaka was fined Tk3 lakh for not doing VAT registration.
The commissionerate has decided to continue the drive to find the VAT-related frauds. A standing order will be issued soon in this regard, officials say.
According to NBR data, nearly 750,000 traders are enlisted as VAT payers, among which, only some 85,000 submit VAT returns.
The VAT commissionerate (north) officials said they were receiving around 40 complaints daily on an average.
Among the complaints received, 80% are against food stores and restaurants while 10% are against super shops and the rest against shops with other nine criteria eligible for using ECR.
“Once we receive complaints, we print this out and send it to the concerned field offices. A 10-member team, headed by two additional commissioners, scrutinise the allegations and take actions accordingly,” an official said.
NBR officials requested consumers not to receive any manual receipt from the traders and check if the printed receipts are ECR-generated with 11-digit BIN.
“Many food shops and restaurants are operating business with old 10-digit BIN. Consumers are requested to check the number and complain to field offices concerned if they find any inconsistency,” said an official.
On October 18, the South commissionerate officials raided the Birds Eye Roof Top Restaurant in the city’s Paltan and found over Tk1 crore VAT was not paid.
According to section 15 of VAT Act 1991 and rule 9 (3) of VAT rule 1991, the VAT registration is mandatory to start any business.
Check the BIN status online:
The VAT Checker app was recently developed by a group of youths to help the government find VAT evasions.
Consumers can now download the app in their mobile phones to instantly check the BIN number of any restaurant or food stores.
If the number is found invalid, it means the company is running business without any BIN, which is an offense under the law.
Then the consumers can directly complain to the commissionerates using the app, officials said.
Source: Dhaka Tribune
