The High Court has ruled that BRAC Bank Limited unlawfully adjusted Tk 74.43 lakh in Value Added Tax without declaring the mandatory input-output coefficient of raw materials in three income tax years.
The verdict, delivered by the single bench of Justice Md Ashraful Kamal on January 30, was published on the Supreme Court website on Wednesday.
The court made this observation while rejecting a VAT appeal filed by BRAC Bank, which challenged the legality of a December 19, 2021, order issued by the commissioner of the Large Taxpayers Unit (VAT) in Dhaka.
Additionally, the High Court invalidated BRAC Bank鈥檚 VAT adjustment for the income tax periods of July, August, and September 2019, citing non-compliance with mandatory input-output coefficient 鈥� a key requirement for ensuring transparency in tax calculations.
The ruling reinforces the need for strict adherence to VAT disclosure requirements, ensuring financial transparency and regulatory compliance in the banking sector.
Under VAT laws, businesses must disclose their input-output ratio to justify tax adjustments.
Failure to comply not only violates tax regulations but can also impact customers, as improper tax handling may influence banking fees and service charges.
Zahidul Murad Tuhin, representing BRAC Bank, told 抖阴精品 on Saturday that under the VAT Act of 1991, input-output declarations were required only for production and raw material procurement to prevent tax evasion.
However, since 2019, VAT has been applied to both production and services, raising questions about how banks should determine price declarations under the revised tax framework, he added.
