Petrobangla not paying over Tk 22,584cr VAT

Petrobangla bank account may freeze again

Zarif Mahmud: NBR is facing many questions and difficult challenges of not being able to collect the overdue revenue of government institutions. According to the latest calculations, the amount due to Petrobangla from 2009 to July 2021 is Tk 22,584.54 crore.
NBR’s Large Tax Paying Unit (LTU) has been sending one after another demand letters to Petrobangla to collect overdue revenue. But it is not being realized in any way. Petrobangla repeatedly says that there is no money in the fund. They are saying that the matter should be adjusted through the Ministry of Finance.
A senior officer of NBR’s VAT department told Daily Industry that Petrobanglahad once a huge amount of money in its status. If they had taken appropriate initiatives then, such a situation would not have arisen today. Once they made huge profit. But did not pay dues. Besides, the company could have found a way to pay the revenue with the help of the Ministry of Finance. But despite repeated requests, NBR did not get any fruitful response from them. Petrobangla is number one in NBR’s list of arrears even in 2022-23 financial year.
The official also said that Petrobangla’s bank account was made non-operable in June 2022 to collect dues. Then the bank account was made operable due to the promise of regular VAT deposit from the next tax period along with payment of dues for the financial year 2021-2022. But the company did not keep their promise. Now the NBR is rethinking to freeze Petrobangla bank account again.
Attempts were made to contact senior officials of Petrobangla to find out why the dues are not being paid, but no one agreed to speak.
Petrobangla General Manager (Finance) Ghulam Mortazaspoke about the same a few months ago. He then told the Daily Industry (the situation is still the same) ‘Currently we do not have the ability to pay the dues. We have requested the Finance Ministry to adjust. In this regard, a letter has been given to the Ministry of Finance through the concerned Ministry (Ministry of Fuel) to show it as a subsidy. The VAT authority will remain liable till the adjustment is made. But we do not have the ability to pay.
A meeting was held in this regard last July 25 at the head office of NBR. In the meeting, the dues of Petrobangla were discussed with greater importance. If necessary, their bank accounts are monitored, but they are urged to apply pressure to collect the money. And it was decided to send another letter to the Petrobangla authorities from the large taxpayer unit of NBR to collect the due VAT.
Petrobangla has been claiming for years that they have no savings in bank. However, in the financial year 2020-21, Petrobangla’s balance in various funds was Tk 19,200 crore.
In June 2022, the NBR issued a letter to the largest taxpayer unit-VAT, citing a figure of money deposited in Petrobangla’s bank.
It is said in that letter – ‘Analyzing the annual audit report conducted by the CA firm of Petrobangla for the financial year 2019-20, it can be seen that according to page-20 of the said audit report, there is a balance of Tk 10,428 crore against 39 STD bank accounts. According to page 25-32, against 382 FDR bank accounts, about Tk 7,111 crores are held as Petrobangla Bank. Besides, according to page-22 of the audit report, an interest income of Tk 3 crore has been shown as duty and VAT. Petrobangla is not depositing the duty and VAT sector money to the government treasury on time and is earning interest on the said money by investing in FDR and STD. But VAT is not paying from the deposit. However, due to lack of financial resources, the VAT department has been informed at various times that dues are not being paid. However, as per the annual audit report analysis conducted by the CA firm, Petrobangla has the capacity to pay the absolute outstanding revenue of the government. Even then, not paying the due VAT is unacceptable.
A senior Petrobangla official told Daily Industry on the condition of anonymity that NBR and Finance Ministry have been requested to show the outstanding revenue as book adjustment. But it got stuck due to some procedural complications related to audit. It is true that NBR has again sent letters to the Finance Secretary and Energy Secretary to address the issue, but nothing is being done or when it will be done.