KSRM faces Tk 231cr VAT evasion charge

The Chattogram VAT commissionerate filed a case on Thursday accusing KSRM Steel Plant of dodging value-added tax (VAT) payments worth Tk 231.17 crore on product sales and raw material purchase.

The alleged evasion took place during a span of five years since fiscal 2016-17, said the Customs, Excise and VAT Commissionerate, Chattogram.

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However, KSRM Steel Plant, a sister concern of Kabir Steel Re-Rolling Mills (KSRM), claimed that they were yet to be informed of the matter.

The case was filed reviewing data on computers and reports of annual sales, purchases and chartered accountancy firms seized during a raid at the Sitakunda plant mid-June, said the VAT officials.

The company was supposed to forward to the exchequer VAT amounting to Tk 188.71 crore paid by customers against its sale of 18.74 lakh tonnes of products from July 2016 to May 2021, showed a document.

But it deposited Tk 103.42 crore, meaning Tk 85.29 crore had been evaded, it added.

The company was also supposed to pay VAT Deducted at Source amounting to Tk 145.88 crore against the purchase of 19.98 lakh tonnes of raw materials from January 2017 to May 2021, according to the document. However, none of it was paid, it read.

"A written explanation will be sought from the company very soon," Mohammad Akbar Hossain, commissioner of the VAT commissionerate, told The Daily Star.

"If they fail to provide valid documents, we will impose a penalty equal to the amount evaded as well as interest as per rules," he added.

"We have not been informed of any VAT evasion incident by KSRM from the VAT commissionerate office," Samsul Haque, director (corporate) of the KSRM Steel Plant, told this newspaper.

"A team of VAT officials conducted a raid in our factory last June but they did not make any contact with us since then," he said.

"If there has been any revenue evasion, we are obliged to pay but before that we should have been given a chance to defend ourselves," he added.

"We trying to communicate with the commissionerate office and nothing can be said before that," he said.

Bangladesh's steel industry sales amount to some Tk 55,000 crore annually.

There are about 40 active manufacturers with a combined capacity to produce nine million tonnes of steel a year.

Of them, KSRM and three others meet more than half of the annual demand of eight million tonnes.