VAT intelligence sues Frontdesk for evading VAT worth Tk21.50 crore
Leading business organisations in the country are the clients of Frontdesk
The Value Added Tax (VAT) Intelligence Department has identified VAT evasion worth Tk21.50 crore of Frontdesk Bangladesh Ltd, a human resources service provider, at Baridhara in the capital.
The VAT Intelligence Department also filed a case on Wednesday against Frontdesk in this regard.
Frontdesk has been operational since February 2015 and sells technical and general human resource services to reputed business institutions in the country.
Acting on a tip-off about VAT evasion, a VAT intelligence team raided Frontdesk's Baridhara office on August 10 and seized computers and stored commercial documents from their premises under section 83 of the VAT Act.
After thorough analysis, it was found that Frontdesk has evaded a huge amount of VAT by hiding the actual service sale price. They showed the nominal service price in their VAT return.
Investigation by VAT intelligence has also found that from February 2015 to July 2020, Frontdesk sold services worth Tk32.84 crore. And, it paid VAT of Tk2.68 crore against the sales.
But according to the seized documents, Frontdesk sold actual services worth Tk129.65 crore. And they were supposed to pay VAT on these sales worth Tk19.45 crore.
The human resource institution has evaded VAT of around Tk15.74 crore in the last five years.
Following the VAT Act, a 2% monthly interest rate has been applied on this evasion. The amount of interest is Tk5.75 crore.
Now, a total of Tk21.49 crore is recoverable from this company.
Frontdesk Bangladesh Ltd is a Human Resource Supply or Management organisation under VAT Act Service Code 072.00. According to this law, a 15% VAT is applicable on the total receipt for sale of services.
VAT intelligence investigation also found that the country's leading business organisations are clients of this human resource service.
The clients include: Lafarge Holcim, Banglalink Digital Communications Ltd, Micro Bangladesh Ltd, Fintech Solutions Ltd, Berger Paints Ltd, Novartis Bangladesh Ltd, P&G Bangladesh Ltd, Opsonin Pharma Ltd, Robi Axiata Ltd, Juton Bangladesh Ltd, APM Global Logistics Ltd, and MNS Bangladesh, among others.
As Frontdesk is under the jurisdiction of the Dhaka North VAT Commissionerate, the case will be sent to the Dhaka North Commissionerate for recovery of the evaded VAT and identity of the crime of VAT evasion.
