Singer deprives govt. of revenue earnings by evading huge VAT

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Singer deprives govt. of revenue earnings by evading huge VAT

Staff Sorrespondent

Published : Thursday, 4 November, 2021 at 7:55 PM, Update: 04.11.2021 8:01:42 PM, Count : 4489

Singer deprives govt. of revenue earnings by evading huge VAT

Multinational Company Singer Bangladesh Limited has been evading giant amounts of value added taxes by concealing its actual sales record year after year unlawfully. Although the multinational company has been earning huge profits each year from doing business in Bangladesh, they deprived the government from getting due revenues.

Before the COVID-19 pandemic, Singer Bangladesh posted record profits in the financial year 2019, but they evaded large amounts of VAT. According to NBR sources, an investigation by the Large Taxpayer Unit (LTU) of National Board of Revenue (NBR) discovered the VAT evasion by by Singer Bangladesh.

The chairman and managing director of the listed company are foreigners. In the last few years, these two foreigners have brought a variety of products to the attention of consumers. Prior to Corona, Singer Bangladesh has achieved record profits in 2019. But the company has deprived the government of the revenue it receives.

According to the source, the VAT return is submitted in the name of the merged entity. This return is submitted for invalid rebate. Although the company merged, the VAT Commissionerate was not informed. The company has 424 sales outlets across the country. Of these, 314 are out of central registration. None of the 19 warehouses have VAT registration. As a result, VAT on unregistered sales outlets and warehouses was embezzled. Although the annual turnover of the company is Tk 1,500 crore, they have paid only Tk 33 crore VAT. In just four months, the company has taken about 94 crore VAT evasion and illegal discounts!

LTU has found evidence of such irregularities in the multinational company Singer Bangladesh Limited. Initiatives have been taken to take legal action against irregularities that inspect and search the listed companies in the capital market.

Akram Uddin Ahmed, Chief Financial Officer (CFO) of Singer Bangladesh Limited, told that he did not know about the VAT evasion case filed by LTU. We have not received any letter or notice. 'Regarding the registration of 314 outlets, he said,' One of our registrations is in LTU, the other is in Motijheel division under VAT South. Registration of all sales outlets is in Motijheel division; LTU does not know about this. You can go to Motijheel division and see. '

How does International Appliance Limited return after merger? Asked whether the information of the company which was merged to illegally take discounts and evade VAT has been withheld, he said, "This company is not under LTU, so they do not know." All have been reported. If LTU says so, it will not happen. I would like to say to LTU, we have moved to LTU from another commissionerate. But we have a lot of problems. '

"Our factory is registered with LTU," he said. We have a trading and manufacturing unit. VAT is deducted everywhere. Singer said that despite the turnover of Tk 1,500 crore, the LTU and the two commissioners paid only Tk 33 crore in VAT last year. Would the NBR have given up if it had committed fraud? LTU thinks Singer is like Bata, Apex. We pay VAT at the port stage. I pay VAT on sales. LTU has told us to raise the price of the product. Is that possible? Why VAT and rebate will be evaded? There was a problem with their calculations. '

According to NBR sources, the multinational American company Singer has been doing business in Bangladesh since 1905. the company manufactures and markets some products in Bangladesh. Some products are imported and marketed from abroad. Singer Bangladesh Limited has three VAT registrations. One of the factories of the company is registered in LTU. Another company called International Appliance Limited is registered with the Dhaka West Customs, Excise and VAT Commissionerate. Besides, the sales center of the company is registered with Dhaka (South) Customs, Excise and VAT Commissionerate. Singer filed returns in three places as there were three VAT registrations in three places. It is alleged that the company used the opportunity to operate VAT and rebate fraud, unregistered outlets and warehouses. The LTU took the initiative to look into the matter. As part of this, two teams were formed.

On May 25, a team raided the Genda Warehouse in Genda area of ??Savar and another team at Fulbaria Warehouse in Dhaka. Various commercial and VAT related documents were seized after inspecting and searching the two establishments. Verification of these documents reveals disturbing information of VAT evasion against sale, taking illegal discounts at multiple places of the same organization. On June 14, the LTU filed three separate cases against the company, alleging VAT evasion and illegal concessions amounting to about Tk 94 crore. In February, March, April and May of this year, the company evaded VAT by taking VAT and illegal discounts against sales in these four months.

On the other hand, the LTU report said that Singer Bangladesh has three VAT registrations. One of the factories of Singer Bangladesh Limited (Jamur, Rajfulbaria, Savar) is under the jurisdiction of LTU. Another factory called International Appliance Limited is registered with the Dhaka (West) Customs, Excise and VAT Commissionerate. Under the central registration, the company has 110 outlets registered with the Dhaka (South) Customs, Excise and VAT Commissionerate. However, VAT officials got a list of Singer Bangladesh's warehouses and sales outlets in the documents seized during the inspection, so that it can be seen that the number of actual sales outlets of the organization is 424. But the number of sales outlets of the company has been shown in the central registration in Motijheel division under Dhaka (South) Commissionerate. The remaining 314 outlets are out of VAT registration. In other words, even if VAT is collected in these outlets, the government does not get it. In addition, according to the inspection, the company has 19 warehouses, two of which were inspected by VAT officials. These 19 warehouses are also out of VAT registration. Singer Bangladesh produces some products in Bangladesh, some products are imported by Singer's factories in other countries. After production and import, the products are kept in these warehouses. These products are sold from the warehouse to the sales center. Again it is sold and supplied from the warehouse to dealers and other organizations. Singer Bangladesh does not pay any VAT on the supply of goods from this warehouse. According to the report, since these outlets and warehouses are not covered by any registration, these warehouses and outlets are under the jurisdiction of LTU and fair assessment activities including collection of VAT are under the jurisdiction of LTU. These outlets and warehouses are being operated in violation of VAT laws. LTU is taking legal action against the irregularities in these outlets and warehouses.

According to the report, a meeting was held on August 23 under the chairmanship of the commissioner of LTU on the management of the company under the VAT Act. Singer's officials were present. After the meeting, Singer Bangladesh informed LTU in a letter on August 25 that International Appliance Limited had been merged with Singer Bangladesh Limited as per a February 1 directive of the High Court. However, the representatives of the organization did not say anything about this in the meeting of LTU. As LTU learns, Singer files a monthly return in the name of the merged organization. The matter was not reported to the Dhaka (West) VAT Commissionerate.

According to the High Court judgment, International Appliance Limited currently has no legal existence. As it is merged with Singer Bangladesh Limited, at present Singer Bangladesh Limited will be considered as a limited company only. As the existing factory of Singer Bangladesh is under the jurisdiction of LTU, the LTU will supervise the economic activities, nature, scope, ownership and jurisdiction of the company in accordance with the VAT laws and regulations. But Singer did not inform LTU about this. No evidence has yet been provided to the LTU as to when, how it was integrated, whether it was included in the RJSC. Since the company is listed on the stock exchange, it did not provide any evidence to the LTU on the date on which it was listed on the stock exchange. VAT also did not provide any evidence as to whether the West was notified in writing.

The report further said that the LTU contacted the Savar VAT Department under the Dhaka (West) VAT Commissionerate to find out that Singer had also filed a VAT return in the name of International Appliance in August in violation of the directions of the Bangladesh court and in violation of VAT law. All the activities of International Appliance will be conducted in LTU through Singer Bangladesh after the merger as per the directions of the court. But Singer Bangladesh has been committing such irregularities mainly to evade VAT and take illegal concessions. Singer was instructed to comply with the VAT Act.

In addition to taking action under VAT law, an NBR official told that a criminal case should file against the multinational company. The NBR will take action in this regard. In 2020, the annual turnover of the company is over one and a half thousand crore takas. According to the turnover, the company has been evading hundreds of crores of rupees in revenue every year.

It may be mentioned that Singer Bangladesh Limited was listed in the country's capital market in 1983. The company is currently in this category. Of the company's total shares, 56 per cent are held by entrepreneurial directors, 22.98 per cent by institutional investors, 6.6 per cent by foreign investors and 13.96 per cent by general investors.

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