Grameen Kalyan, a non-profit social business founded by Muhammad Yunus, has filed an appeal in the Appellate Division against a High Court order directing it to pay Tk666 crore in taxes claimed by the National Board of Revenue (NBR), reports Jamuna TV.
Earlier, on 10 September, the HC bench of Justice Md Mozibur Rahman Miah and Justice Rezaul Karim passed the order. Senior Advocate Abdullah Al Mamun argued for Grameen Kalyan, while Deputy Attorney General Abdus Samad Azad stood for the state.
The NBR raised the tax demand for five tax years – from 2012-13 to 2016-17 – after reassessing Grameen Kalyan's taxes. The tax dispute concerns tax deducted at source on dividends received from Grameenphone.
Grameen Kalyan lawyer Khaja Tanvir told reporters that the High Court dismissed a rule challenging the NBR's demand, meaning the tax authority's demand remains in force.
"We challenged the NBR's claim before the High Court Division, and the court today dismissed the rule. As a result, the NBR's claim has been upheld," he told reporters.
The deadline for payment will be known after the full text of the judgment is released, he said at the time.
The dispute
In 2017, Grameen Kalyan filed separate writ petitions with the High Court, challenging the validity of the NBR's tax demand. On 4 August 2024, the High Court dismissed the writ petitions in a judgment delivered by a bench.
However, following the change of government on 5 August 2024, the High Court on 29 August withdrew that judgement after it emerged that the junior judge had previously served as a deputy attorney general representing the government in the cases.
The judgment was therefore recalled, and the case records were sent to the Chief Justice. The cases were subsequently assigned to a new bench for hearing.
Explaining the tax dispute, Grameen Kalyan lawyer Abdullah Al Mamun at that time said Grameenphone deducts 15% tax at source when paying dividends to Grameen Kalyan.
"Why should additional tax be imposed after that tax has already been paid? That is the question that brought us to court. Yet the matter was reported as a tax evasion case," he said.
A member of the Grameen family of companies, Grameen Kalyan was founded by Nobel Peace Laureate Yunus in 1996. It was registered with the Office of the Registrar of Joint Stock Companies and Firms under the Companies Act in November 1996 and with the NGO Affairs Bureau in July 2002.
NBR's claim
According to the case details, Grameen Kalyan entered into an agreement with its affiliate Grameen Telecom in 2004 to invest part of the funds needed to operate hospitals and clinics providing public and healthcare services to disadvantaged people. Grameen Kalyan is a charitable organisation established under Section 28 of the Companies Act.
Under the agreement, Grameen Kalyan provided Tk532,562,941 as a loan to Grameen Telecom, which invested the money in purchasing shares of Grameenphone in its own name.
In return for the financial support, Grameen Telecom agreed to pay Grameen Kalyan 42.50% of the profit earned from dividends.
After reopening Grameen Kalyan's tax records for the 2012-13 to 2016-17 assessment years under Section 120 of the Income Tax Ordinance, the authorities imposed tax at 35% on the assessed income through revised orders. The total tax demand was Tk666,91,52,370.