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BDSERVICE

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BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): The Company is defending these objections as it believes that these were neither factually correct nor consistent with the prevailing VAT legislation. The Company maintains its position that all VAT rebates claimed are legitimate, relevant requirements of the VAT Act 1991 have been appropriately followed and any withholding VAT are duly deposited to the Government exchequer. (Cont.16)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): operation of the Company, the LTU - VAT has also issued demand notices of Tk. 282,159,786 for the years 2010-2011 and 2011-2012 and Tk 120,220,847 for the year 2012-2013 on the grounds of not collecting supplementary duty and VAT on supplementary duty from sale of alcoholic beverages at restaurants of the Hotel and taking rebate on restaurant services without price declaration. (Cont.15)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): C) Value added tax (VAT) and supplementary duty: Large Taxpayers Unit (LTU) - VAT has issued a demand notice to the Company for Tk 24,732,774 which allegedly resulted from claiming VAT rebates on certain items, not paying VAT on rent received and unpaid VAT as deducted at source from suppliers for the period July 2005 to June 2010. Pursuant to an audit conducted by the Local and Revenue Audit Department on the Hotel (Cont.14)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): 5,954,210 and BDT 9,340,009 respectively against which the Company has made appeals to relevant appeal authority which are still pending. No provision has been made in the accounts for the additional amount claimed by the tax authority as the Company has reasonable grounds to believe its appeal against such unjust additional demand will be ultimately successful and these would be set aside at the time disposal of final appeal. (Cont.13)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): Against the guarantee, the Company has paid a sum of Taka 920,215 as margin against bank guarantee and the amount is shown under sundry debtors in these financial statements. No provision has been made in these financial statements against the above. B) Income tax pending matters: The income authority has made an additional claim for the assessment years 2007-2008 and 2008-2009 amounting to BDT(Cont.12)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): to pay the entire amount of Taka 9,200,346 to the contractor. The Company has filed an appeal with the Hon'ble High court in 2004 against the verdict, the ultimate outcome of which is uncertain. To comply with the terms of the contest petition, the (Continuation news of BDSERVICE): Company issued a bank guarantee in favour of the court amounting to Taka 9,200,346 which has been shown as contingent liability being letter of guarantee in the books of the Company. (Cont.11)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): The contractor filed a petition to the 3rd Sub Judge Court of Dhaka to enforce the award given by the umpire, whereas the Company decided to contest it. The case was sent back on remand by the Hon'ble Supreme Court vide judgment dated 02 July 2001 passed in F.M.A no: 235/99 filed by BSL with a direction to dispose of the matter. Recently the 3rd Sub Judge court has upheld its previous verdict in favor of contractor and directed the Company (Cont.10)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): The arbitrators differed on certain matters and sent their reports to the umpire. The umpire has given the following awards on 02 April 1998: i) The Company shall refund the entire amount of VAT amounting to Taka 7,003,669 to the contractor as deducted from the invoices. Ii) The contractor is also entitled to claim damages to the extend of Taka 2,196,677 for payment of its invoices by the Company. (Cont.9)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): in accordance with the provision of the arbitration Act 1940. Both the parties nominated their Arbitrators; Late Justice Badrul Haider Chowdhury was nominated by the contractor and Mr. M.S.I Chowdhury was nominated by the Company and the arbitrators appointed Justice Kemaluddin Hossain, the former Chief Justice of Bangladesh as umpire and thereafter arbitral proceedings started. (Cont.8)

BDSERVICE 05-Dec-2019

(Continuation news of BDSERVICE): A) Letter of guarantees: Balance of Letter of guarantees as at and for the year ended 30 Jun 2019 was BDT 9,200,346 and as at and for the year ended 30 Jun 2018 was BDT 9,200,346. In the course of executing the contract work, certain disputes have arisen between the Company and its contractor Mir Akhter Hossain Limited. As per the terms of contract, the contractor was authorized to refer the matter to arbitrator for resolution of the dispute (Cont.7)

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