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Robi loses court battle with BTRC

The operator will have to pay Tk 200cr extra to the regulator

Abdullah Mamun
Robi Axiata yesterday lost a court batde with the telecom regulator, meaning the mobile operator will have to pay its licence renewal and spectrum fees to the regulator without deducting tax at source.
Robi will also have to pay VAT on telecom licensing fees, revenue sharing and spectrum assignment fees to the National Board of Revenue as the High Court discharged a writ petition of the operator on these issues.
The amount may total Tk 200 crore, according to an estimate of the regulator.
However, Robi will go to the Appellate Division against the judgement, said its officials.
Robi filed the writ petition with
the High Court on January 5, challenging a statutory regulatory order (SRO) of the tax administrator that imposed VAT on telecom operators for licence renewal.
The operator challenged the provision for VAT on licence renewal, saying a licence is neither a product, nor a service. Only products and services are subject to VAT, Barrister Fatema Anwar, a lawyer for the operator, had said while filing the writ in January.
As Robi had been paying its licence renewal and spectrum fees by deducting tax at source since 2010, now the operator will have to pay all the outstanding amounts, said Barrister Khandaker Reza-E-Raquib, a lawyer for Bangladesh Telecommunication Regulatory Commission (BTRC).
According to the BTRC lawyer, Robi will have to pay more than Tk 141 crore as 15 percent VAT of spectrum charge and around Tk 5.69 crore as late fee for the outstanding money.
Robi was also directed to deposit the 15 percent of the outstanding fees to the BTRC as deducted since July 2010 on account of VAT from the annual licence fee, revenue sharing and annual spectrum fee.
This amount will be aroundTk52.59 crore including a late fee, said Raquib, adding that the total payable amount of Robi will be around Tk200 crore.
Telecom operators had been sharing revenue with the regulator after deducting 15 percent as VAT since 2010 when the tax administrator issued the SRO. Mahmudur Rahman, executive vice president of Robi, said the company is now waiting for the certified copy of the j udgement.
"So it is not possible to say anything about the payable amount, he said.
The HC had around 20 hearings in the case, said Raquib.
He said Grameenphone, another operator, also had a same kind of case in which the High Court division gave the same kind of judgement in
favour of the regulator.
Though Grameenphone will get rebate from the 15 percent VAT paid to the tax administrator, the court did not say anything about such a rebate for Robi, he added.
Another official of Robi said the company deposited more than Tk 800 crore in licence renewal and spectrum fees to the telecom regulator in November deducting 15 percent VAT at source in line with the SRO of the tax administrator.
He said the company also gave 15 percent VAT on the spectrum charges to the NBR after a judgement of the HC in January.
However, licence renewal of four mobile operators --Grameenphone, Banglalink, Robi and Citycell — is still held up due to the court battles between the operators and the regulator, while their 2G licences expired in November last year.
The operators are continuing their operations under an interim order of the regulator.