Delta Life Insurance sued for Tk 25cr VAT evasion

Delta Life Insurance Company Limited has evaded VAT worth Tk 25.34 crore, according to an investigation report of the VAT Audit, Intelligence and Investigation Directorate.

The VAT Intelligence lodged a case in this connection on Thursday.

Based on specific VAT evasion allegations, a VAT Intelligence team led by its deputy director Munawar Mursalin conducted the investigation.

The team reviewed the VAT documents of the insurance company from January 2013 to December 2017.

The investigation team obtained relevant documents including annual CA report, submission receipt (VAT-19), treasury challan copies and others, for cross-checking.

According to the report, Delta Life has paid Tk 10,976,001 as VAT on its health insurance service, whereas the net payable amount was Tk 97,851,955, concealing real sales information.

The amount of the unpaid VAT was Tk 86,875,954, and as per the VAT law, Tk 100,111,853 will be applicable as 2 per cent monthly interest on the evaded amount.

The investigation report also reveals that during the audit tenure, the company paid Tk 63,407,803 as VAT in source which is mentioned in its audit report. However, the amount of payable VAT was Tk 92,237,252.

To this point, the company evaded VAT worth Tk 29,508,589.

The realisable interest stands at Tk 34,489,697 for the VAT evaded—applicable at source – as per the VAT law with a monthly 2 percent interest rate.

Meanwhile, during the investigation, the company cleared Tk 31,818,691 as rent. But the payable amount of VAT was Tk 31,751,506 and it evaded VAT worth Tk 1,249,716.

The company also has to pay Tk 1,209,250 as a 2-percent interest as per the VAT law.

Delta Life evaded a total of VAT worth Tk 117,634,262 and accordingly, the interest of the evaded tax stood at Tk 135,810,799, while the net evaded amount of VAT is Tk 253,445,061.

The investigation report reveals that the company adopted fraudulent measures to evade VAT to the government which is a punishable offence according to the VAT law.

The report was sent to the VAT Commissionerate (Dhaka North) concerned for legal action and to recover the evaded VAT.