NBR detects Tk 1,400cr of unpaid VAT of S Alam firms

Ten companies of S Alam Group have been ordered to pay Tk 1,414 crore of unpaid value-added tax (VAT) they allegedly “evaded” in the past two years.
Of the firms, S Alam Refined Sugar Ltd, SS Power Ltd, S Alam Cold Re-Rolling Mills, and Chemon Ispat Ltd have around Tk 1,319 crore of unpaid VAT, an indirect tax paid by the ultimate consumers.
The remaining six concerns of the Chattogram-based group have around Tk 100 crore of unpaid VAT, according to the audit reports by the Customs, Excise & VAT Commissionerate, Chattogram.
The field office of the National Board of Revenue (NBR) came up with the findings more than a month after it formed four teams to conduct audits into business activities and transactions of 18 concerns of S Alam Group to verify if they have paid the VAT properly.
Tafsir Uddin Bhuiyan and Kamrul Hasan, joint commissioners of VAT, were appointed as heads of the four teams formed on August 19.
The Daily Star could not reach S Alam Group’s Chief Financial Officer Subrata Kuman Bhowmik despite repeated phone calls and text messages for comments.
With the latest findings, the total amount of unpaid VAT by the concerns of S Alam stands at around Tk 5,000 crore.
The field office of VAT, in separate audit reports submitted in May 2024, found that S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd allegedly “evaded” Tk 3,538 crore through various means, including by presenting lower purchase and sales data in VAT returns between 2019 and 2022.
In its latest audit, the NBR’s field office of VAT found that S Alam Refined Sugar allegedly “evaded” Tk 755 crore of VAT.
S Alam Sugar claimed Tk 7,219 crore in sales in its audited financial statement for the 2021-22 and 2022-23 financial years, according to the reports by audit teams formed by VAT Commissionerate Chattogram.
However, the company showed Tk 1,751.47 crore in its VAT return in the two years.
As such, the company did not show Tk 5,468 crore as sales in the VAT returns and “evaded” Tk 713 crore as VAT, as per the report.
The company also “evaded” Tk 42.18 crore of source VAT during the period, as per the reports.
Similarly, SS Power Limited claimed payment of the source VAT of Tk 516 crore in its financial statement audited by a chartered accountancy firm.
Actually, the company paid Tk 316 crore, according to the audit reports by the VAT office.
As such, the VAT Commissionerate in Chattogram issued a show cause notice asking the company for payment of the outstanding source VAT of Tk 200 crore.
The audit team of the field office of VAT also found out that S Alam Cold Re-Rolling Mills has Tk 215 crore of unpaid VAT and Chemon Ispat Ltd Tk 147 crore.
“We have issued demand notices to the companies,” said Syed Mushfequr Rahman, commissioner at Customs, Excise & VAT Commissionerate, Chattogram.
He said the VAT Commissionerate is also in the process of realising the unpaid VAT of Tk 3,538 crore and fines from S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd.
Rahman said his office has issued notice to the two companies for payment of unpaid VAT in 21 working days.
“If they do not clear (the payment), we will go for freezing the bank accounts of the companies and locking business identification numbers to realise the VAT,” he said.
S Alam Group came under greater scrutiny from the regulatory agencies, including tax compliance, after the fall of the Awami League government in early August this year.
Mohammed Saiful Alam, chairman and managing director of S Alam Group, is widely believed to be a beneficiary of the previous government.
The Bangladesh Financial Intelligence Unit has sought account details of S Alam and his family members, while the Bangladesh Bank restructured the boards of banks, which were dominated by S Alam and his family members during the tenure of the previous government.