The VAT Intelligence and Investigation Directorate has detected an alleged revenue evasion of around Tk 72.5 crore by Virgo Tobacco Ltd through the production and marketing of cigarettes using used and counterfeit stamps or banderols.
A preventive team of the directorate conducted a surprise raid on the company’s factory at Kaultia in Gazipur on September 2 based on information received from a confidential source, says an NBR press release.
Two teams simultaneously raided the cigarette factory and a nearby warehouse. When the teams arrived, the factory gate was locked from outside despite production allegedly continuing inside.
After repeated requests to open the gate received no response, the VAT intelligence officials entered the premises by climbing over a wall and found cigarette production underway.
The officials also noticed smoke coming from an area of the factory and found used banderols and cigarettes bearing counterfeit banderols being burned.
The officials asked the company to produce documents authorising the destruction of the cigarettes and banderols, but the company could not produce any such documents. Officials also said no approval had been obtained from the competent departmental authority for the destruction.
The company’s general manager subsequently confirmed in a written statement that around 50 lakh sticks of cigarettes bearing counterfeit banderols had been destroyed. The VAT intelligence team seized the remains of the burned banderols as evidence.
During further searches, the teams seized used stamps and banderols, various raw materials used in cigarette production and three mobile phones from the factory, adjoining warehouse and a residential building.
Samples and empty packets of some foreign cigarette brands were also found at the premises. The directorate said a detailed investigation into those items was underway.
According to the initial findings and analysis of the seized evidence, the company allegedly used both valid and previously used stamps or banderols to produce and market cigarettes covertly.
The directorate’s IT and cyber forensic teams analysed chat histories, concealed sales-related messages and photographs of accounts recovered from the seized mobile phones.
The analysis indicated that a substantial portion of the cigarettes produced by the factory had allegedly been supplied to the market without VAT invoices (Mushak-6.3) and kept outside the company’s main accounting records.
Based on the seized goods and data recovered during the investigation, the authorities initially estimated that the government had been deprived of around Tk 72.5 crore in VAT and supplementary duty.
A case has been filed against the persons and entities concerned under the Value Added Tax and Supplementary Duty Act, 2012 and relevant rules.
The case, No. 17/2026, was filed on September 14.
The VAT Intelligence and Investigation Directorate said its nationwide operations would continue in line with National Board of Revenue (NBR) directives to protect government revenue and prevent illegal production and marketing of tobacco products and revenue evasion through fake stamps and banderols.