Singer faces Tk 94cr VAT evasion charge
A field office of the National Board of Revenue has brought a VAT evasion allegation against Singer Bangladesh Ltd and claimed nearly Tk 94 crore as indirect tax from the electronics and home appliance seller.
The multinational denied the allegation.
Inspections last May revealed that Singer had not registered 314 sales centres and 19 warehouses, said Large Taxpayers Unit, Value Added Tax, which collects the indirect tax from big local and multinational companies.
Singer's records of March officially showed it had 110 showrooms, said the NBR field office, adding that this discrepancy was a violation of rules.
Singer Bangladesh has three separate VAT registrations.
It itself is registered with the Customs, Excise & VAT Commissionerate, Dhaka (South) as a trading entity for selling imported and locally manufactured appliances.
Its factory is listed with the LTU, VAT as a manufacturer. Another factory, International Appliance Ltd, is registered with the Customs, Excise & VAT Commissionerate, Dhaka (West).
The inspections found that a 15 per cent VAT should be realised from Singer on products delivered from two of the unregistered warehouses between December 2020 and April 2021, said the LTU, VAT.
The company's Genda, Savar warehouse delivered Tk 363.46 crore of appliances, the VAT on which amounts to Tk 54.52 crore, it said.
Similarly, Singer's Rajfulbaria, Savar warehouse delivered products of Tk 56.6 crore, on which VAT of Tk 8.49 crore is applicable, it added.
A VAT at source on space rent is also applicable, said the LTU, VAT.
Moreover, Singer claimed a Tk 30.88 crore input tax credit on electricity and utility bills of the 19 warehouses and transport services, it said.
Input tax credit refers to the reduction applicable when paying tax on output, considering the tax already paid on inputs.
Since the establishments were unregistered, "the rebate already claimed will be cancelled", said the LTU, VAT in a letter to Singer sent earlier this year.
"We have asked for explanations," said a senior LTU, VAT official seeking to remain unnamed.
Contacted, Singer said it had 431 retail outlets and warehouses and all were registered with the South commissionerate.
"We have papers with regard to registration," said Singer Bangladesh Chief Financial Officer Akram Uddin Ahmed earlier this month.
"We have not evaded paying any VAT," he said, adding that Singer was paying the indirect tax on sales of all its showrooms.
Singer will give its explanation in a reply to an LTU, VAT notice issued last month, he said.
A South commissionerate official said Singer had VAT registration for 110 units until March this year but it showed over 400 showrooms in its return and claim for input tax rebate.
"The company gave a summary of its showroom based sales in the returns and did not give details. So we also got some gaps," said the official, seeking to remain unnamed.
Beginning operations in Bangladesh in 1905 with its iconic sewing machine, Singer now offers multiple brands of electrical home appliances.
The company's turnover rose 8 per cent year-on-year in the January-September period of 2021 to Tk 1,334 crore.
Meanwhile, its profit after tax declined 6 per cent to Tk 59 crore, according to its latest unaudited financial statements.
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