Allegations of VAT evasion of Tk 231 crore against KSRM

Desk Report: The Chittagong Customs, Excise and VAT Commissionerate has filed a case against the company for VAT evasion. KSRM, the country’s leading rod manufacturer, has been accused of evading VAT of Tk 231 crore in the last five years by concealing purchase and sale information.

The Chittagong Customs, Excise and VAT Commissionerate has filed a case against the company after raiding one of its factories last month. On June 22, a team from the Chittagong Customs, Excise and VAT Commissionerate conducted an operation and seized the company’s commercial documents and two computers.

This huge amount of VAT evasion information came out from the seized documents by concealing the information of purchase and sale. The Customs Excise VAT Commissionerate has filed a departmental case to recover the evaded money.

The investigation report of Chittagong Customs, Excise and VAT Commissionerate has reached The Business Standard.

According to the report, KSRM evaded VAT on sale of manufactured goods and VAT on source of raw materials. The company has concealed the details of the products produced and evaded Tk 75.29 crore 15 thousand 695 and Tk 145 crore 8 lakh 8 thousand 84 for VAT on the purchase of raw materials.

Ahsan Ullah, Deputy Commissioner, Chittagong Customs, Excise and VAT Commissionerate, said, “Based on the information that KSRM, a rod manufacturer, has been evading VAT for a long time, we conducted a raid on the company’s factory.” Analyzing the documents seized during the operation, this information came out about the huge VAT evasion of the company.

KSRM Steel Plant Limited marketed 16 crore 74 lakh 37 metric tons of MS rods from July 2006 to May this year.

On the other hand, the company is supposed to pay 18 crore 81 lakh 46 thousand 514 rupees VAT. But without doing so, the company pays only 103 crore 42 lakh 30 thousand 618 rupees VAT. The company evaded the government’s VAT of 65 crore 29 lakh 15 thousand 695 rupees.

On the other hand, although there is a provision to pay VAT at source against all purchases including purchase of raw materials, the company did not show any documents or return of withholding VAT against all purchases from January 2016 to May this year. Thus, in the last four and a half years, the company has evaded VAT at source against the purchase of 19 lakh 96 thousand 7 metric tons of raw materials.

In this regard, Mohammad Akbar Hossain, Commissioner, Customs, Excise and VAT Commissionerate, Chittagong, said, “I have received secret information that KSRM has not been paying VAT properly for a long time and is evading VAT regularly.” A search and investigation by our rescue team turned out to be a huge hoax.

The company will be issued a show cause notice soon. In this case the same amount of evaded revenue has to be paid as penalty and applicable interest. The evaded money has to be deposited in their government treasury. No concession will be given in this regard.

It may be mentioned that the demand of MS rod in the country is about 6 million metric tons every year. A total of 235 small and large factories produce 60 to 70 lakh metric tons of MS rods every year. Of these, KSRM, the country’s leading company, supplies about six to eight lakh metric tons of rods to the market every year.

“I am not aware of the matter,” said Meherul Karim, chief executive officer of KSRM Steel Plant. We have a separate VAT and Legal Department to look into the matter of VAT. I will be able to talk to that department.

Habibur Rahman, an official of KSRM’s VAT department, said that people from the Chittagong Customs, Excise and VAT Commissionerate raided the factory and took away some documents. However, we have not yet received any documents from the VAT Commissionerate.

Statement of KSRM

Meanwhile, KSRM is not aware of the statement sent to various media outlets quoting Chittagong Customs, Excise and VAT Commissionerate under the headline ‘Revenue evasion of Tk 231 crore by KSRM Steel Plant Limited’.

Because the VAT Commissionerate has already seized some documents but no statement has been taken from us. Moreover, we were not informed about the matter either in writing or orally. We should have been the first to know if the document review identified revenue evasion. Instead, KSRM is being humiliated with a statement.

KSRM is always committed to pay any legal dues. This does not mean that we will not be informed. If we were informed about the matter, we would have the opportunity to take that initiative. There was also an opportunity to set a payment deadline. But we were not given the opportunity to defend ourselves in this matter. Which in no way can be desirable.

Sending a press release to the media on the day of closing the matter cannot be logical in any way. In this way, we do not have the opportunity to give any kind of statement without verifying and being aware of the truth of the matter. This is basically a unilateral decision. We have not had any discussions with the concerned people before. But this decision will damage our brand image, which is unexpected.

Source: Business standard


Source: Daily StockBangladesh by www.dailystockbangladesh.com.

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