The Bata Shoe Company Bangladesh Ltd are reported to have taken a tax rebate of Tk1.23 crore (US$ 214,000) on the basis of a supposed payment of the tax by three supplier companies. Customs officials found that the suppliers did not pay VAT and consequently they cancelled the rebate asking the company to pay the amount immediately.

The customs authorities have also issued three notices against Inter-Fashion Leather and Footwear Industries, ILFIL Leather Products and Lexco Footwear Ltd, all located at Badekolmesshawar in Gazipur, demanding Tk1.23 crore (US$ 214,000) from each of the companies for their role in the tax evasion.

Bata officials, however, said they did not do anything wrong and cancellation of the rebate was unlawful. They took the rebate against supply of goods made outside the factory as VAT was paid during supply of the raw materials.

They claimed that the government did not lose any revenue and that the suppliers also submitted a VAT invoice indicating payment of their portion.

‘We submitted an application to the VAT commissioner (appeal) against the rebate cancellation’, said Aminul Hoque Miazi, accounts manager of Bata shoe company.

Customs officials alleged that the VAT invoices submitted by those supplier companies were false.

The irregularities were revealed in an investigation by a customs intelligence team from the Customs, Excise and VAT Commissionerate, Dhaka North.