NBR Uncovers Tk 3.28 Crore VAT Evasion at Dhamrai Electronics Firm

Customs, Excise and VAT Commissionerate, Dhaka (West), has uncovered alleged VAT evasion amounting to Tk 328.23 million (Tk 32.82 crore) by an electronics company in Dhamrai, Dhaka.

According to the National Board of Revenue (NBR), the company concealed information relating to its sales as well as the purchase of goods and raw materials, resulting in the evasion of a substantial amount of government revenue.

In a press release issued on Sunday, the NBR said that a preventive operation was conducted at Xinlian Electronics Technology Bangladesh Co. Ltd., located at Nabagram in Dhamrai, on September 17, following a confidential tip-off and under the instructions of the Commissioner of Customs, Excise and VAT Commissionerate, Dhaka (West).

The company, bearing BIN No. 007545559-0404, is registered as a manufacturer of lithium batteries.

During the operation, however, officials found that the company was engaged not only in manufacturing batteries but also had imported mobile chargers, headphones of various brands and Bluetooth headphones ready for supply, alongside manufactured batteries and raw materials and equipment used in battery production.

As the inspection initially indicated possible VAT evasion, the authorities seized relevant documents and records maintained at the premises under VAT Form 12.3 for further scrutiny and verification.

According to the NBR, a review of the seized documents revealed discrepancies in the company's sales records.

The company was found to have concealed sales information amounting to Tk 145,618,507 (Tk 14.56 crore).

Based on the concealed sales information, the amount of VAT evasion was calculated at Tk 189,858,92.

The revenue authorities said the amount was determined after examining the company's actual sales-related records and comparing them with the information reflected in its VAT records.

The authorities also examined documents relating to the company's purchase of goods and raw materials.

According to the NBR, the company concealed purchase information involving goods and raw materials worth Tk 152,208,775 (Tk 15.22 crore).

The VAT evasion associated with the concealed purchase information was calculated at Tk 138,371,161 (Tk 13.84 crore).

Combining the two components—Tk 189,858,92 in VAT evasion arising from concealed sales and Tk 138,371,161 arising from concealed purchase information, the total VAT evasion identified by the authorities stands at Tk 328,230,53 (Tk 3.28 crore).

Information relating to the operation indicates that although the company is registered as a lithium battery manufacturer, officials found various other electronic products at the premises during the raid.

These included imported mobile chargers, headphones of different brands and Bluetooth headphones reportedly kept ready for supply.

The authorities subsequently examined the company's records to determine whether its registered business activities, imports, manufacturing operations and sales were properly reflected in its VAT-related accounts and declarations.

The National Board of Revenue said further action would be taken promptly in accordance with the relevant laws and regulations to recover the government dues.

The VAT evasion amount of Tk 328,230,53 was identified through a review of documents seized during the operation, according to the revenue authority.

The final determination and recovery of the government dues will be carried out following the applicable legal and procedural requirements.

The Customs, Excise and VAT Commissionerate has been conducting preventive operations and reviewing business records as part of efforts to detect revenue evasion. Such inspections are intended to verify whether companies' actual transactions, sales and purchases correspond with the VAT information submitted to the authorities.

In the case of Xinlian Electronics Technology Bangladesh Co. Ltd., the review of seized documents brought to light the alleged concealment of transactions and VAT evasion amounting to more than Tk 3.28 crore, according to the NBR.