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Brick factories flout VAT rules due to political links

BIRGUNJ, APR 14 - Most brick factories in the three districts of the Mid-Tarai have not been registered to pay value added tax (VAT) despite a government order making it compulsory for them to do so. According to government officials, the Brick Manufactures Association has been discouraging potential registrants in Parsa, Bara and Rautahat districts.

On one occasion, executive members of the association even tried to beat up a brick manufacturer who had registered his factory with the VAT office after the Revenue Investigation Office, Pathlaiya seized his truck loaded with bricks. Most brick manufactures have been getting away without paying VAT due to their strong links with politicians.

“Factory owners are not wiling to register,” an official of the Revenue Investigation Office, Pathlaiya said. “They keep on making excuses promising to register their firm in the next fiscal year.”

Head of the Revenue Investigation Office (RIO) Surya Sedhai said that 17 trucks loaded with bricks bound for Kathmandu and Pokhara had been taken under control recently. According to him, bricks belonging to factories without a license or whose permits had expired were impounded. The firms that are registered with the VAT office have been issuing VAT bills.

Revenue and tax offices started taking action against firms that have not registered with VAT and those not issuing proper bills after the Inland Revenue Department issued strict orders to act. According to Sedhai, they were compelled to take action as the factory owners showed no signs of registering even after three weeks of the circular being issued.

Around 200 brick manufacturing companies are operating in the three districts of Parsa, Bara and Rautahat. Due to an inefficient monitoring mechanism, dozens of factories have been operating without a license while 80 percent of those that have obtained licenses have not renewed them.

The government has been losing revenue worth millions of rupees in fees and taxes as a result. Arjun Bhattarai, head of the Inland Revenue Office, Birgunj said that the renewal fee has been set at Rs 12,500 annually. Meanwhile, president of the Brick Manufacturers Association Rajkumar Sindhi said that the issue had surfaced due to lack of awareness among taxpayers. “We will pay all the applicable taxes from the next fiscal year,” Sindhi added. “We have also started the process to register with VAT.”

According to Bhattarai, the office will impose a 100 percent fine for failure to renew the license. Out of 21 factories in Parsa, two have renewed their license and 10 have registered with VAT. “We are not aware about the status of others,” Bhattarai said. “Those registered with VAT have not cleared excise duty either.”

Posted on: 2013-04-15 08:38

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By Abin

So it's for the victims? I thought the 'relief' material should go into my pocket!


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