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Bottlers face uneven playing field on banderole labelling

STAR BUSINESS REPORT
Soft drink bottling companies are exposed to an uneven competition in local market as one of them has obtained a four-month stay order from the High Court on an NBR order that made it mandatory to attach VAT (value-added tax) banderoles with bottles.
The National Board of Revenue (NBR) through a statutory regulatory order (SRO) on May 20 last ordered soft drinks and water bottling companies to use banderole, a system proved foolproof in collecting VAT from tobacco companies, from June 1.
But the beverage companies, which started labelling the bottle corks with banderoles from June as per instruction of NBR, are complaining of an uneven playing field resulted from a particular company's reluctance to comply with the order.
However, the tax watchdog and the company, Partex Beverage Ltd, the bottling company of Royal Crown (RC) brand drinks, gave opposite version on the issue.
Partex Beverage complained that they did not get necessary
machine specifications and information in time from NBR to implement the banderole system while the NBR refuted the claim saying the company like the rest was given all information in time.
Meantime, following a petition from Partex Beverage, a High Court division bench on July 7 stayed the operation of the NBR SRO for four months for the petitioner company and asked it to continue paying VAT as per previous system.
Hafizul Kabir, member (VAT) of NBR, told The Daily Star on Tuesday last that there is no logic on the part of the beverage company to complain about not getting specifications and information regarding banderole machine as the board had talks with every company several times in the last one year.
"The NBR has provided the beverage companies with all the necessary information regarding banderole machine three months before introduction of the system and it is enough time to procure the machine. The system was to take effect from May 2 but we defer it by one month to give more time for preparation of the companies," he said.
Aziz Al Kaiser, managing director of Partex Beverage, could not be contacted for his comments as he was abroad. However, Md Mayeenuddin, commercial manger of the company said the NBR did not provide necessary machine specifications like cut mark, length and brochure regarding banderole machine in time.
"But we have already ordered for machine and hope will be able to implement the banderole system soon," he said.
Abul Kashem Haider, chairman of Youth Group, bottler of Virgin drinks, said as banderole system is an effective tax collecting tool, a few quarters in businesses and tax administration are trying to obstruct the process.
"The government should ensure a level playing field in business," said Haider, also vice-president of the Federation of Bangladesh Chambers of Commerce and Industry.
NBR introduced banderole system for tobacco companies in 2002 and following the success it plans to expand the system to other sectors also.