Telecom operator Grameenphone is intentionally not paying value-added tax (VAT), a charge on the rental for the use of Railway’s optical fibre.
Grameenphone under a leasing contract with Bangladesh Railway has been using railway’s optical fibre network since 1997.
Grameenphone is required to pay 15 percent VAT on the guaranteed annual rental (GAR) for using optical fibre from Railway authority.
Railway sources said after signing the contract, the telecom operator used to paying rental and VAT on time but it stopped paying VAT on 3rd and 4th installment of the 21st year of singing without any logical reason.
The telecom operator thus evaded VAT to the volume of Tk 10.28 crore.
The railway authority in a recent letter issued on 27 September, requested the National Board of Revenue to take necessary steps against the company to collect arrear as per rules, NBR sources said.
Railway sources said despite paying rentals and VAT properly earlier, the company paid only rental except VAT on 3rd and 4th installment in the 21st singing year with the excuse of not issuing VAT chalan from railway authority to them.
However, the railway authority used to issuing certificates regularly against the company’s VAT payments, they said.
As per the recent letter, the railway authority sought direction of NBR as Grameenphone stopped their VAT payment, and the revenue authority passed necessary instructions to them.
The railway authority later asked the telecom company in a letter to pay the VAT arrear with reference of NBR’s instruction though the company did not pay any heed to the Railway’s plea, the letter reads.
However, the Grameenphone sources said they would pay the VAT arrears only after the Railway issues VAT chalan to them. They claimed that the railway, as a VAT registered entity is required to provide VAT chalans to Grameenphone against their VAT payment.
As per railway’s estimation, Grameenphone is required to pay TK 3.50 crore per installment (three month basis) in the 22nd signing year including arrear, and the remaining arrears would increasingly be added to the next year’s installments.
With the financing of Norway government, Bangladesh railway in 1986 took a project for developing a optical fibre based telecommunication system in the country and the project came into operation since 1992 which covers about 2000 kilometers area of the countryside.
However, a huge amount of latent capacity of the optical fibre project was found unused, and that is why Bangladesh railway, in 1997 made a leasing contract with Grameenphone Bangladesh through an internal tender.
As per the contract, Grameenphone uses railway’s optical fibre to enhance their networking system.
The railway and Grameenphone renewed the contract twice later to extend the contact duration and as per the latest renewal in 2017, the contract has been extended until 2027.
Grameenphone pays Bangladesh railway TK 106 crore annually as rental, as per the contract, sources said.