Eorange sued for VAT evasion; membership suspended

Highlights

• Eorange evaded Tk13 lakh in VAT
• It paid only Tk6.24 lakh in VAT
• It is supposed to pay 5% VAT on commission

The VAT intelligence directorate on Thursday filed a case against e-commerce platform Eorange in connection with evading VAT amounting to Tk13 lakh. 

The case report was sent to Dhaka North Customs, Excise & VAT Commissionerate for taking legal action against the online platform, said Moinul Khan, director general at the VAT intelligence directorate.

In the meantime, the Bangladesh Bank has sought bank statements of e-commerce platform Eorange's chairman Sonia Mehjabin and managing director Maksudur Rahman. The central bank issued the letter to banks to provide the information within the next five working days, a central bank high official told The Business Standard. 

On 8 June, the VAT intelligence raided Eorange's Gulshan office and seized documents. Later, the agency found evidence of VAT evasion after analysing the documents. 

According to documents, the company purchased goods and services worth Tk286 crore and sold those at Tk250 crore in a specific period. The company was supposed to pay Tk19.40 lakh in VAT at a rate of 5% on the commission, but it paid only Tk6.24 lakh.

The investigation revealed that the e-commerce platform evaded VAT amounting to Tk13.16 lakh by concealing the actual sales information.

Meanwhile, e-Commerce Association of Bangladesh (e-CAB) suspended the membership of Eorange and three other e-commerce companies for their failure to provide proper explanations to the e-CAB's show-cause letters.

The other three companies suspended are www.24tkt.com, www.greenbangla.space and www.excellentbigbazar.com, according to an e-CAB press release.

There are allegations of embezzlement, non-settlement of complaints of buyers and suppliers, non-compliance with digital commerce operation guidelines against these e-commerce firms, the press release also said.

e-CAB sent show-cause letters to 16 e-commerce firms over the allegations against them.

Of the 16 accused, nine completely denied the allegations, while the others prayed for time with a commitment to resolve grievances and comply with the Digital Commerce Management Guidelines-2021.

In this regard, e-CAB stated that further investigation is underway keeping the nine institutions under observation.

If there is no satisfactory solution, a similar decision may be taken regarding those institutions, said e-CAB.