A major case of alleged value-added tax (VAT) evasion involving forged invoices, falsified documents and fake official signatures has emerged around Meghna Star Cables and Electrical Appliance Limited, raising fresh concerns about weaknesses in tax oversight and verification in public procurement.
Investigators say the company concealed crores of taka in VAT by using counterfeit Mushak-6.3 invoices and omitting sales data from official returns. The irregularities were identified in connection with government work orders worth Tk57 crore, where more than Tk8.60 crore in VAT was allegedly evaded.
Officials fear the figure may represent only a portion of a wider pattern. In response, the National Board of Revenue (NBR) has seized company records to assess the full extent of potential tax evasion.
According to investigation documents reviewed by TIMES of Bangladesh, the case centres on the company’s supply of cables to the Bangladesh Rural Electrification Board (BREB).
While multiple consignments were delivered under several invoices, investigators found that the corresponding sales and VAT were not fully reflected in the company’s monthly declarations.
An initial review identified VAT evasion of around Tk8.60 crore. In response, invoices and financial records are now under scrutiny by the NBR for a broader examination.
In a written response to the VAT commissioner, the company said it had already deposited Tk4.44 crore with the government and would pay the remaining amount.
One of the most serious findings relates to documents used to verify the invoices.
Revenue officials whose signatures appeared on verification papers formally denied signing them. Examination of official dispatch registers also found no record of such documents being issued.
Investigators say this indicates that not only were fake invoices used, but the verification process itself may have been manipulated through forged documentation.
Further questions arose over procedural lapses. Bangladesh Rural Electrification Board told investigators that some documents had been entered into its registry and then carried by a company representative to the VAT office for verification – despite rules requiring such communication to be handled directly between government offices.
Following the investigation, Customs, Excise and VAT Commissionerate (Dhaka East) imposed a penalty equivalent to 100% of the evaded tax. Two cases were filed against the company, both resulting in rulings in favour of the tax authority.
However, the company has challenged those decisions in the High Court.
Commissioner Rashedul Alam said part of the assessed amount has already been recovered, but the matter remains under legal review.
The case originated from a show-cause notice issued on 13 April last year, which accused the company – based in the Meghna Industrial Economic Zone in Sonargaon – of using false tax invoices in supplies to BREB.
VAT authorities later conducted multiple inspections at the company’s factory and offices, seizing invoices, purchase and sales registers, and other commercial documents.
Separately, Customs Bond Commissionerate (Dhaka South) issued a notice after the company failed to complete its annual audit.
In a letter dated 22 September, authorities warned that failure to submit required documents for the audit period from 9 July 2024 to 8 July 2025 could result in suspension of the company’s bond licence and Business Identification Number (BIN).
In a reply dated 22 October 2025, Managing Director Md Mostofa Kamal said the company had supplied cables under three contracts with BREB and reiterated that nearly half of the claimed VAT had already been paid.
He also said it was not possible to provide all documents immediately, as they had been seized during the investigation.
Attempts by TIMES to reach him for comment were unsuccessful. However, a company representative said the firm had sought legal remedy in the High Court.
Tax officials say the use of fake invoices or forged documents to evade VAT constitutes a serious offence under Bangladesh law.
Under the Value Added Tax and Supplementary Duty Act, 2012, offenders may face recovery of unpaid tax, financial penalties of up to or exceeding 100 per cent, and potential imprisonment.
The case has raised broader concerns about the effectiveness of tax monitoring systems and the integrity of verification processes in government procurement.
Officials warn that without stronger oversight, similar practices could persist undetected, potentially leading to significant revenue losses.
