The National Board of Revenue (NBR) has sued the operator of popular consumer goods brand Rupchanda, which is owned by the Indian Adani Group and Singapore-based Wilmar International, on charges of evading over Tk19 crore in value-added tax.
The Large Taxpayers Unit (LTU-VAT) of the revenue board filed the case on 24 July and issued a show-cause notice to the company on 23 October.
The notice stated that between January 2023 and June 2025, Bangladesh Edible Oil Limited (BEOL) purchased 27.3 million kilograms of rice worth around Tk239.53 crore from 32 unregistered local suppliers without deducting or depositing the required value-added tax deduction at source (VDS).
A copy of the notice seen by TIMES of Bangladesh shows that the company procured BR-28, Chinigura, Kataribhog, Nazirshail and Miniket varieties locally and marketed them under its Rupchanda brand.
Since none of the suppliers were VAT-registered, tax officials said the responsibility for VAT deduction at source fell on the buyer.
Value-added tax deduction at source refers to a system where the buyer or service recipient deducts a certain percentage of VAT from the payment made to the seller or service provider and then deposits that amount directly into the government’s treasury on behalf of the seller.
Under the Value Added Tax and Supplementary Duty Act 2012 and the VAT Deduction and Collection at Source Rules 2021, source VAT deduction is mandatory even when purchasing exempt goods or services from unregistered suppliers.
However, BEOL failed to comply, resulting in a significant revenue loss to the government, the notice said.
According to LTU calculations, the unpaid VAT deductible at source amounted to Tk8.92 crore in 2023, Tk4.88 crore in 2024, and Tk5.32 crore in 2025 – totalling Tk19.13 crore.
The company was notified that this amount is payable to the government, with instructions to submit a written explanation within 15 working days. Failure to respond within the stipulated time or to provide a satisfactory explanation would lead to legal action, the notice warned.
The company was also informed that interest would accrue on the outstanding amount until full payment following final tax determination.
Operating in Bangladesh since 1993, BEOL produces and markets several leading edible oil brands such as Rupchanda, Mizan and Kings. Recently, the company has also started selling packaged rice under the Rupchanda brand.
Responding to the allegation, BEOL officials said they are not the only company engaged in corporate rice trading.
Many established corporations, including the Ministry of Food, procure rice from local markets, and none have ever deducted source VAT for such transactions, they added.
“Only our company has been targeted for VAT evasion despite others following the same practice,” said BEOL General Manager Md Dabirul Islam.
“We have always complied with tax laws and have never evaded any VAT or duty. In the interest of justice, the show-cause notice should be withdrawn – or else it should apply uniformly to all.”
He further cautioned that if a 7.5 percent VAT at source is imposed across the board, rice prices could increase by Tk7-8 per kilogram, potentially destabilising the market.
Bangladesh Rice Industries Association President Md Mujibur Rahman said the NBR’s demand notice was “completely illogical and harassing.”
He said, “If 7.5 percent VDS is deducted, rice prices will rise by the same percentage.”
He added that according to SRO 240 on VAT, if a supplied good or service is exempt under a government notification, VDS deduction is not required.
“Therefore, LTU’s demand for advance VAT on rice supplies is unlawful,” he said.
In response, LTU Commissioner Syed Atikur Rahman, who issued the notice, said VAT exemption on rice was granted through an SRO, not directly by law under the First Schedule.
“As a result, the suppliers are considered service providers, and the source VAT deduction applies by law. That is why the demand notice has been issued,” he said.
“We will act in accordance with the law after receiving the company’s reply,” he added.
Regarding allegations that the rule was selectively applied, the commissioner said that in the past, revenue officials did not pursue such matters because the Commerce Ministry had a policy exempting rice from VAT and taxes. “But now, we are following the law,” he said.
