In the backdrop of the massive VAT evasion allegations against the catering service providers, the National Board of Revenue (NBR) has unearthed VAT evasion of around Tk2 crore by two prominent catering service providers.
Fakruddin Food and Biriyani and Iqbal Hossain Catering Service Operations- were found involved in the VAT evasion for long time.
In separate drives on December 4, the VAT audit, intelligence and investigation directorate raided the office of the two catering service providers located at New Baily Road and Adabar in Mohammadpur and found that altogether both the two companies evaded around Tk2 crore.
Both the two companies are decorator and caterer service providers and were entitled to pay 15% VAT on their sales as per existing law.
However, both the two service providers have been evading the VAT, which is around 99% if counted, according to NBR officials.
These two caterers provide food to prominent venues including Shenakunja, Hosaf Convention Center, Shimanto Convention Center, Golf Garden, International Convention City Bashundhara (ICCB), PSC Convention Hall, and RAOWA Club in the city.
Among the VAT evaded, Fakruddin Food and Biriyani evaded Tk36,01,118 as VAT while Iqbal Hossain Catering Service Operations evaded Tk1,44,92,061 as VAT.
Both the two companies were involved in huge amount of VAT evasion, as they were not issuing any VAT receipts and were involved in non-preservation of account records and negligence of law, said officials.
After calculations, officials said, “Iqbal Hossain Catering is liable to pay minimum Tk2.5lakh as VAT on their average daily sales. The company has provided food valued Tk9,44,85,841 to Bangabandhu International Conference Center (BICC) in between May 2013 to November 2015. The caterer was liable to pay Tk1,44,92,061 as VAT, but it did not pay its due.
On the other hand, Fakruddin Biriyani has sold food items of Tk2,45,58,269 in the last 11 months and was liable to pay Tk36,73,739 as VAT.
It also got advance for food items worth Tk75,13,335 where it was liable to pay Tk11,27,000 as VAT. But, it did not pay the amount.
VAT intelligence officials said both the catering providers have hidden their sales related documents during the drive, so the actual amount of their sales remains untraceable.
Both the catering service providers did not conduct any annual audit on their respective accounts.
This is for the first time since 1993, any government agency has conducted raids at caterers sector, said officials.
The drive was conducted after the tax authorities started strengthening its monitoring and surveillance on VAT evading service providers to meet the gigantic revenue collection target of Tk1,76,370 crore. The board has to collect Tk64,262 crore as VAT, government’s second biggest source of revenue earning.
