Foodpanda, the largest online food supplier in the country, has been sued for evading Value Added Tax (VAT) worth Tk3.40 crore.
The VAT Intelligence Department filed a case on Wednesday against Foodpanda in this regard.
Previously, on 15 October, a team of VAT detectives conducted a drive to Foodpanda Bangladesh Limited, in the Gulshan area of the capital, following specific allegations of VAT evasion.
The drive was led by Deputy Director Nazmun Nahar Kaiser and Assistant Director Md Mohiuddin, of the VAT Intelligence Department.
The BIN number of Foodpanda is 002156066-0101. The company collects food from about 5,000 food stores and delivers it to consumers via bikers. Foodpanda has an agreement with those sellers and it receives a certain amount of commission for delivering the food.
During the drive, Foodpanda was asked to show the company's VAT-related documents, and the officials on duty showed the documents. Also, the computers used at the organisation were searched.
Some secret information of monthly sales was recovered from a computer used by a Foodpanda higher official.
The VAT detectives also seized some other business documents during the drive.
After analysing the VAT documents of Foodpanda, it was found that they were conducting business by registering under the information technology service (service code S-099.10).
They were evading VAT on house rent using the registration code. Although the code does not match their business, they have been using it to avail zero VAT on house rent, illegally.
Foodpanda sells products using an electronic network (online platform), and its actual service code is S-099.60. Under this code, VAT is 5% and VAT on house rent is 15%.
According to the information seized from a computer of Foodpanda, sales data worth Tk275,857,517 were found in the months of July 2019 to January 2020, and April 2020.
However, the company showed sales of Tk156,519,972 in the local Gulshan VAT circle for this period.
In this case, the company has hidden sales of Tk119,337,545 in the last eight months, on which the amount of evaded VAT is Tk5,310,074.
Due to non-payment of this VAT on time, interest worth Tk965,620.91 – at a 2% interest rate per month – is applicable.
The company has not paid any VAT on house rent since its inception as it had inconsistent registration under service code S-099.10.
Following the seized CA report from 2014-2018, it has paid house rent of Tk25,035,499, on which the applicable VAT is Tk2,906,026.
Further, according to the seized rental agreement from January 2019 to August 2020, Tk18,400,000 has been shown for the house rent, on which the applicable VAT is Tk2,760,000. In other words, the company has evaded VAT worth Tk5,666,026 for the house rent.
As the VAT on the house rent has not been paid on time, a 2% interest rate is applicable per month as per the VAT Act so the amount is Tk23,61,920.
Additionally, reviewing the submitted documents shows that the company, despite being a limited company, did not pay VAT at any source on the purchase of goods. According to the report from 2014 to 2018, VAT worth Tk12,435,553 has been avoided at the source.
As VAT is not paid on time at this source, the interest is Tk7,212,219 – at the rate of 2% per month – as per the VAT Act.
Foodpanda Bangladesh Limited has evaded VAT of Tk5,310,074 for the sale of goods, Tk5,666,026 for house rent and Tk12,435,553 for deductions at the source, totaling Tk23,411,653. Further, Tk10,540,260 will be applicable as interest on the evaded VAT.
The company is involved in VAT evasion of a total of Tk3.40 crore.
The case, filed by the VAT detectives, will be sent to Dhaka North VAT Commissionerate for disposal.