Foodpanda faces Tk 34m lawsuit on VAT dodge charges in Bangladesh

The authorities have slapped online food delivery company Foodpanda with a Tk 34 million lawsuit on charges of dodging Value Added Tax.

Senior Correspondentbdnews24.com
Published : 28 Oct 2020, 03:57 PM
Updated : 28 Oct 2020, 04:09 PM

The VAT Audit, Intelligence and Investigation Directorate of the National Board of Revenue filed the suit on Wednesday.

The charges against the company include using a wrong service code for registration, concealing actual sales data and dodging VAT at source.

The directorate said in a statement that its agents led by Deputy Director Nazmunnahar Kaiser and Assistant Director Md Mohiuddin conducted an operation on the Foodpanda office at Gulshan-2 in Dhaka on Oct 15.

Foodpanda gets commission from around 5,000 eateries in Dhaka on delivering food to customers, according to the statement.

It is registered as a IT service provider and has been enjoying a waiver on VAT on house rent, a facility for IT companies only, although it does not provide IT services, the directorate said.    

The VAT applicable under the code for businesses providing services by using an electronic platform is 5 percent. Such firms also must pay 15 percent VAT on house rent.

Citing documents seized during the operation, the directorate said that Foodpanda hid the information about sales of services worth over Tk 119.3 million in past eight months and dodged more than Tk 5.3 VAT payable on the sales.

In line with the VAT law, the 2 percent interest on the dues totalled Tk 965,620.

Foodpanda also dodged Tk 5.66 million VAT on house rent payable from 2014 until now. The interest on the due house rent VAT is over Tk 2.3 million.

The company has not paid over Tk 12.4 million VAT at source for purchase of products between 2014 and 2018 despite being a limited company. The interest on the amount is Tk 7.2 million, the directorate added.