VAT intelligence has uncovered an alleged Tk72.5 crore tax-evasion scheme at Virgo Tobacco Ltd in Gazipur, where investigators say the cigarette maker used previously used and counterfeit banderoles to conceal production and sales from its books.
The alleged scheme emerged after a surprise raid on the company’s factory at 43/1 Kaultia in Gazipur Sadar on 2 September, when investigators seized documents and later analysed mobile-phone data that they said revealed undeclared cigarette sales.
The Directorate of Audit, Intelligence and Investigation, Value Added Tax, said its preliminary calculations put unpaid value added tax and supplementary duty at about Tk72.5 crore.
Acting on a tip-off, two VAT intelligence teams simultaneously targeted the factory and a nearby warehouse. Investigators said the factory gate was locked from outside even as production continued inside.
After repeated calls to open the gate went unanswered, officers climbed over a wall and entered the premises, where they found cigarettes being produced. Smoke on the factory grounds then led investigators to cigarettes bearing used and counterfeit banderoles that were being burned, according to the directorate. The company could not produce documents for the cigarettes being destroyed and said it had not obtained approval from the relevant divisional official to burn them.
Virgo Tobacco’s general manager said in a written statement that an estimated five million cigarettes bearing counterfeit banderoles had been burned. Investigators seized remnants of the burned banderoles as evidence.
A subsequent search of the factory and an adjacent warehouse and residential building yielded used stamps and banderoles, cigarette-production raw materials and three mobile phones.
Samples and empty packets of several foreign cigarette brands were also found, and investigators are examining them further.
A preliminary review of the seized material indicated that Virgo Tobacco had used legitimate stamps and banderoles alongside previously used ones to secretly produce and market cigarettes, the directorate alleged.
Its information technology and cyber-forensic team analysed chat histories, undisclosed sales messages and photographs of accounts recovered from the three phones.
Investigators said the data showed the factory had for a long period supplied a substantial portion of its cigarette production without VAT invoices, known as Mushak-6.3, while keeping those sales out of its main accounting records.
Based on the seized goods and recovered data, the directorate estimated that about Tk72.5 crore in VAT and supplementary duty had been evaded. A case, No 17/2026, was filed on 14 September against the people and entities involved under the Value Added Tax and Supplementary Duty Act, 2012 and related rules.
The National Board of Revenue said VAT intelligence would continue nationwide operations to protect government revenue and combat illegal tobacco production and sales and the use of counterfeit stamps and banderoles.
