1. 1 PRESENTATION ON VAT OFFENCE, PENALTY ADJUDICATION & APPEAL M.FAKHRUL ALAM Additional Director General Customs Intelligence & Investigation Directorate

2. 2 SCOPE OF OFFENCE AND PENALTY A registered person or a person legally responsible to be registered under VAT shall be liable to a penalty under VAT act if he contravenes any provisions of VAT act and rules made there under.

3. SL no Description of offencesPenalty 01Legally requires to be registered under VAT but does not register The person shall be liable to a penalty at least taka ten thousand but not more than taka twenty thousand 02 Fails to submit return within the specified date The person shall be liable to a penalty at least taka ten thousand but not more than taka twenty thousand 3 General Offences - 37(1)

4. SL noDescription of offencesPenalty 03Fails to inform the VAT officer about any change of information in relation to registration The person shall be liable to a penalty at least taka five thousand but not more than taka ten thousand 04 Fails to comply with the direction of any summons under section 25 The person shall be liable to a penalty at least taka ten thousand but not more than taka thirty thousand 4

5. 5 General Offences - 37(1) SL no Description of offencesPenalty 05Fails to keep VAT related register,ECR, POS software & computer according to VAT law The person shall be liable to a penalty at least taka twenty thousand but not more than taka fifty thousand 06Violates any other provisions of this act The person shall be liable to a penalty at least taka ten thousand but not more than taka thirty thousand

6. 6 OFFENCES UNDER - 37(2) contd. 1 If any person(registered or liable to be registered) : Fails to issue tax invoice or issues an untrue tax invoice in any material particular Fails to pay VAT or SD on goods/service being directed twice, or fails to submit tax return even after the expiry of specified time Submits untrue return in any material aspect

7. 7 OFFENCES UNDER - 37(2) contd. 2 Attempts to evade payable VAT by supplying goods without recording sales information in the sale register and VAT information in the account current register Evades or attempts to evade VAT without recording purchase information of raw material in the purchase register

8. 8 OFFENCES UNDER - 37(2) contd. 3 Evades or attempts to evade tax or takes tax rebate by submitting counterfeit or false documents to a VAT officer Fails to provide any information or documents being directed by a VAT officer

9. OFFENCES UNDER - 37(2) contd. 4 Does not preserve documents, ECR, computerized accounts in POS software, which is required to be preserved under this act, or destroy or alter such documents or records Makes a false statement or declaration, deliberately 9

10. 10 OFFENCES UNDER - 37(2) contd.5 Prevents authorized VAT officers to inspect or to get hold of any records, registers, and also prevent from entering into his business place Takes possession or get involved in transaction of any goods despite of having been known that VAT/SD is evaded on that goods

11. 11 OFFENCES UNDER - 37(2) contd. 6 Takes input tax credit through counterfeit or fake invoice Evades or attempts to evade VAT or supplementary duty by any other means Issue invoice stating therein the amount of VAT even not being a registered person

12. 12 OFFENCES UNDER - 37(2) contd. 7 Does not comply with anything which is legal or does which is illegal according to sub-section(4ka) of section 6 Delivers goods without keeping sufficient balance in the account current Personally does or assists in doing anything specified earlier

13. 13 PENALTY UNDER - 37 (2) Penalty : A penalty of at least half but not more than equal of the amount of tax evaded A penalty of at least 20 (twenty) thousand taka but not exceeding 50(fifty) thousand taka where no tax evasion is taken place

14. PENALTY UNDER - 37(2ka) & 37(2kha) 37(2ka)-According to sec-55,a person is liable to pay unpaid,lesspaid or excess refunded or rebated VAT,SD with interest even after penalized under sec-37(1)(2) 37(2kha)-Any VAT or SD would be collected with interest if not paid inadvertently as per sec-55(3).In this case no penalty would be imposed. 14

15. 15 PENALTY UNDER - 37(2) An imprisonment of at least 3 (three) month but not more than 2 (two) years and a penalty of at least half but not exceeding equal of the amount of tax evaded if convicted in special judge court

16. 16 SCOPE AND PROCEDURES OF SPECIAL JUDGE COURT (SEC 37 KA AND KHA ) Offences mentioned under section 37 (2) are treated scheduled offences of Criminal Law Amendment Act Upon receiving prior approval from Board, an Assistant Commissioner may request Special Judge for carrying out proceedings under this section

17. 17 OTHER OFFENCES AND PENALTY UNDER SEC 37(3) If any registered person fail to deposit its payable VAT/SD or fine imposed in time: OR If any deducting authority fails to deduct or deposit withholding tax in due time :

18. 18 OTHER OFFENCES AND PENALTY UNDER SEC 37(3) Penalty : -A monthly interest of two percent on the payable /deductible to be imposed - The interest to be calculated from the day the tax, or penalty payable or deduction due

19. 19 OTHER OFFENCES AND PENALTY UNDER SEC 37(4) OFFENCES : –Fails to have registration within one month after receiving instruction to get compulsory VAT registration under section 15 (4)

20. 20 OTHER OFFENCES AND PENALTY UNDER SEC 37(4) –No VAT paid within three months after completion of tax period despite of receipt notice from VAT authority,twice, in this regard –Commit offence mentioned in section 38 twice a year PENALTY : –Business premise may be put under lock and key

21. 21 OTHER OFFENCES AND PENALTY UNDER SEC 38 CONTD/1 OFFENCES : –Manufacture VAT-able goods or carry out any VAT-able business without VAT registration –Remove goods without VAT

22. 22 OTHER OFFENCES AND PENALTY UNDER SEC 38 –Supply goods or services without paying correct amount of VAT –VAT invoice is not accompanied with transport carrying VAT-able goods till destination –Violate regulation regarding bandroll

23. 23 OTHER OFFENCES AND PENALTY UNDER SEC 38 CONTD/2 PENALTY : - A penalty of least half but not exceeding the equal of the amount of tax - Goods will be liable to confiscation -Redemption fine may be imposed in lieu of confiscation

24. 24 ADJUDICATION Adjudication is a legal course of action under VAT act observed to be settled cases filed by VAT officials for following reasons : Offence : Evasion of taxes or attempt to be made for such offence through violation of law. (tax evasion case or detention case )

25. 25 ADJUDICATION N ature of penalty : Confiscation and/or penalty imposition if goods are detained and/or tax evaded Offence – irregularities other than tax evasion (irregularity case) N ature of penalty : penalty imposition

26. 26 ADJUDICATION PROCEDURE contd. 1 STEP -1 : Show cause notice to be served to the person concern stating followings points : Description of offences, irregularities Amount of tax evaded or about to be evaded A detail calculation may also be added Reference of related sections, rules and orders violated Proposed penalty as well as sections, rules under which such penalty to be proposed

27. 27 ADJUDICATION PROCEDURE contd. 2 Asking for written response with a request if he/she wish to be heard personally At least two weeks time to be allowed to response Copies of documents, reports in connection to the offence to be supplied Description of every offences to be mentioned separately if more than one offence taken place

28. 28 ADJUDICATION PROCEDURE contd. 3 STEP- 2 An opportunity of hearing to be given if asked for Statements of both side to be noted and signature to be taken More than one hearing may be needed Further investigation may be needed if adjudicating authority thinks fit

29. 29 ADJUDICATION PROCEDURE contd. 4 STEP-3 Adjudication order to be issued by the adjudicating officer without unnecessary delay main features of an order : - short description of the case - description of action taken. Written reply against SCN, statements to be included - analytical observation. - final order. Penalty imposed if charge framed is proved. Section, rules to be mentioned

30. 30 OTHER FEATURES OF ADJUDICATION SCN to be served within two months starting from the day of detention of goods. Other than detention case, as soon as possible Issuance of SCN and hearing not required if person concern applied for summery adjudication in connection with detention case

31. 31 EXTENT OF CONFISCATION The confiscation shall also includes : the container in which the goods are found Any kind of transport used for transporting goods An interim release of transport, pending adjudication, may be made

32. 32 POWER OF ADJUDICATION Nature of adjudication Adjudicating authority power Adjudication related to : (1) Offences in which goods or services to be confiscated (2) Offences of tax evasion in which fine to be imposed Chief Commissioner or Commissioner Value of goods or service exceeds Tk 20 lakh Add. CommissionerNot exceeds 20 lakh Joint CommissionerNot exceeds 15 lakh Deputy CommissionerNot exceeds 10 lakh Asstt. CommissionerNot exceeds 5 lakh SuperintendentNot exceeds 2 lakh Penalty imposition for any irregularities Divisional officerFull authority

33. 33 WHY APPEAL (sec 42) If any person or VAT official aggrieved by any decision or order given by VAT officer, may appeal against such order to the appropriate authority within three months The appropriate authority may extend two more month to file an appeal if it is convinced that appeal was not filed in time due to sufficient reasons

34. 34 APPEAL AUTHORITY Appeals to be filed with: Commissioner (appeal) : if the decision is made by an officer up to Additional Commissioner Appellate Tribunal : if the decision/order is issued by commissioner or Commissioner (appeal) High Court : against the decision of Appellate Tribunal

35. 35 DEPOSITS AT THE TIME OF APPEAL To commissioner Appeal: 10% of fine/tax To Appellate Tribunal against the decision of commissioner : 10% of fine/tax To Appellate Tribunal against the decision of Com (appeal): 10% of fine/tax

36. 36 WHEN NO APPEAL CAN BE FILED Against an order issued or action taken under section 56 ( i.e. actions regarding collection of govt. dues ) Against an order issued by NBR under section 43 (i.e. a review order by Board against an order issued by any VAT officials under NBR)

37. 37 WORKING PROCEDURE OF APPEAL contd. 1 Sufficient opportunity of being heard to be given to the appellant Investigation may take place to collect more information

38. 38 WORKING PROCEDURE OF APPEAL contd. 2 -Appeal authority may : Uphold decision against which the appeal is filed Alters the decision Furnish new order whichever he considers fit Remand to adjudicating authority for further consideration - The appeal filed be granted if appellate authority does not conclude the appeal within 02 years

39. 39 ADR (Alternative Dispute Resolution) Any dispute lying with any VAT authority,Appellate authority or court may be resolved through ADR as in the manner described in section 41(ka) to 41(Ta). VAT or supplementary duty evation through forge or criminal offence,untrue declaration, false document submission or by using same way can not be resolved through Alternative Dispute Resolution(ADR ).

40. 40 THANK YOU