SC orders Brac to pay Tk 404cr in income taxes

The Supreme Court yesterday upheld the government orders asking Brac to pay Tk 404.20 crore income tax for 11 years between 1993 and 2012.

A five-member bench of the Appellate Division headed by Chief Justice Surendra Kumar Sinha delivered the verdict after hearing on 11 government appeals challenging a High Court order that had gone in favour of the non-government organisation.

The HC in December 2014 exempted Brac from paying tax, considering it a charitable organisation.  

It delivered the verdict after Brac had submitted 11 income tax reference applications challenging as many number of notices issued by the deputy commissioner of taxes in Dhaka, which claimed Tk 404.20 crore in total as income tax for 1993-94 to 2011-12 tax years.

Following the SC verdict, Brac has to pay the amount to the tax department, said Deputy Attorney General (DAG) Sardar Md Rashed Jahangir.

The SC scrapped the HC verdict on the grounds that Brac is not a charitable organisation and is liable to pay the income tax under the Income Tax Ordinance 1984, he added.

Meanwhile, Brac in a press statement said it respects the SC ruling and that it would decide the next course of action upon receiving the full text of the judgment.

“Our social development programmes across the country and millions of people who benefit from them will not be adversely affected by the outcome of this ruling,” it said in the press release. 

M Asaduzzaman, a counsel of Brac, said the NGO had already paid Tk 200 crore to the income tax department. 

DAG Rashed told The Daily Star that the deputy commissioner of taxes in Dhaka assessed Brac's income tax at Tk 404.20 crore for the period and issued notices demanding the money from the NGO.

Brac appealed to the appellate commissioner of the tax department, challenging the notices. The appellate commissioner upheld the deputy commissioner's notices but suggested some modifications. 

The NGO then appealed against the appellate commissioner's decision to the appellate tribunal under the tax department. The appellate tribunal's decision also went against Brac, Rashed said.

Later, Brac filed the income tax reference applications with the HC, challenging the appellate tribunal's orders and the notices issued by the deputy commissioner of taxes.

The SC in September last year allowed the commissioner of taxes to move appeals before it to challenge the HC verdict, the DAG said, adding that Brac had paid Tk 68.06 crore in the tax years and then paid some due income tax after last year's SC order.