More than Tk 54.14 crore of value-added tax (VAT) evasion was uncovered during a raid by the VAT Intelligence Department at a cycle manufacturer and exporter's office at Bangshal of Old Dhaka recently.
Acting on a tip-off, the VAT Intelligence team, led by its deputy director Tanvir Ahmed, raided Siraj Cycle Industries on 141 Bangshal Road.
Suspicions arose a year back when the company had shown it earned Tk 19.7 crore in revenue in fiscal 2018-19.
But during the raid, the VAT detectives found audit reports of the company conducted by MN Islam and Company, a chartered accounting firm, which primarily showed that Siraj Cycle had actually earned about Tk 73.9 crore from sales during the period, thus depriving the state coffer of Tk 54.1 crore in VAT collection.
The cycle manufacturer has a factory at Sreepurupazila in Gazipur, and its head office at Bangshal.
During a routine audit of the bicycle trader by the VAT Intelligence last year, they were repeatedly asked to submit their financial statements as per schedules, but the company always delayed for various reasons, leading to suspicion.
On September 26, a year after the start of the audit, Siraj Cycle Industries submitted a few statements, but officials found massive VAT discrepancies.
VAT Intelligence cross-checked with Shahjalal Islami Bank and the Joint Stock of Companies, which only reinforced their suspicions.
However, it is still undisclosed whether Tk 54.14 in VAT evasion was during the production level or from sales.
According to the VAT Act, a 15 per cent VAT is applicable on production and 5 per cent on bicycle trading.
If the company concealed information at the production level, it will have to pay Tk 8.1 crore as VAT. If the company hid data on trading, it would be Tk 2.7 crore.
“In our primary investigation, we have found the company has concealed data of over Tk 54 crore. We will analyse the financial data of the last five years to learn how much VAT they concealed,” Mainul Khan, director general (investigation and audit) of the VAT Intelligence, told Dhaka Tribune.
Based on the findings, they will fix the amount as per the law and they will have to face the music for concealing sales data, he added.