The Appellate Division of the Supreme Court on Thursday cleared the way for the National Board of Revenue to collect outstanding income tax from three private universities.
With the verdict, the highest court of the country paved the way for the collection of income tax from all private universities.
An eight-judge bench chaired by chief justice Obaidul Hassan rejected three appeal petitions filed by University of Liberal Arts Bangladesh, North South University and Southeast University challenging notices issued by the revenue board demanding income tax from them.
On March 4, the NBR issued a notice to the universities asking them to pay income tax following a directive issued by the Appellate Division in a verdict on February 27.
The Appellate Division in the verdict said that the government circular for 15 per cent income tax would be applicable to all the private universities and private medical, dental and engineering colleges.
It delivered the February 27 verdict after disposing of a petition filed by the finance ministry in 2021 challenging a High Court verdict that declared collection of 15 per cent income tax from the 46 private universities and dental colleges as illegal.聽聽聽聽
The High Court pronounced the verdict on May 9, 2016, after hearing separate writ petitions filed by North South University and 45 private universities and medical colleges challenging the legality of NBR鈥檚 claim of 15 per cent tax from the private educational institutions.聽
On Thursday, the Appellate Division published the full text of February 27 verdict, stating that 鈥榯he private universities may not be required to pay tax if it enjoys tax exemption under any lawful arrangement.鈥�
The Appellate Division, in its full verdict, observed that the High Court Division鈥檚 observation that the tax on private universities would increase the education cost of the students, was not 鈥榗orrect鈥�, since the income tax is a 鈥榙irect tax鈥� payable only when a private university earns income and in the case of loss 鈥榥o tax is payable.鈥�
Senior lawyers AF Hassan Ariff and Fida M Kamal and Omar Sadat appeared for the private universities while attorney general AM Amin Uddin represented the NBR.
