Professional Documents
Culture Documents
Imposition of VAT:
Goods
Services
Important Definition
Input means: Except land, labor, building, office equipment and transports, all sorts of raw
materials, any gas, any material used as fuel, packaging material, service, machinery and spare
parts;
In case of trading-goods- imported, purchased, acquired or otherwise procured in any way for
sale, exchange or to transfer in any other manner;
Input Tax means the Value Added Tax paid on inputs imported by a registered person or purchased
by him from any other registered person.
Producer or Manufacturer shall include any person engaged in any of the following activities,
namely;
Transforming or reshaping of any substance by processing individually or in combination with any
other substance, material or components of production to changing, transforming or reshaping it
into different specific substance or goods so that it becomes useable differently or specifically;
Any incidental or complimentary processes needed to complete the goods;
Printing, publication, lithography or engraving processes;
Assembling, mixing, cutting, liquidifying, bottling, packaging or re-packaging
The work of an assignee or trustee, liquidator, executor or superintendent, in case of any
bankrupt manufacturer or producer, and work of any such person who disposes of the assets of
such manufacturer or producer in his capacity as an entrusted person;
Manufacturing or producing any against monetary consideration in his own plant, machinery or
equipment using raw material or inputs owned by the owner of that goods;
Commercial Importer means a person who imports goods, other than those specified in
the First schedule, and sells or transfers it in anyway without changing its shape, nature,
characteristics or quality, to any other person in exchange of pon (consideration).
Trader means a person who sells or otherwise transfers to any other person in exchange
of consideration any goods imported, purchased or otherwise acquired by him without
changing its shape, nature, characteristics or quality;
Divisional Officer means Value Added Tax officer in charge of a Value Added Tax
Divisional Office or an officer not below the rank of Assistant Commissioner assigned to
discharge any function of Divisional Office of the Large Taxpayers Unit of Value Added Tax;
Local Value Added Tax Office means Office of Superintendent/Revenue Officer of
Value Added Tax, or any branch put under the discharge of Superintendent of Large
Taxpayers Unit, Value Added Tax or any other office specified by the Board by notification
in the official Gazette;
Zero-rated Goods or Services means goods or services exported or deemed to have
been exported or any food or any other material as mentioned in sub-section (2) of section 3
on which no Value Added Tax or, Supplementary Duty, as the case may be, shall be
imposed and all other taxes and duties paid on the inputs of manufacturing or producing of
such goods (except Advance Income Tax and the Supplementary Duty paid on any such
inputs, used for manufacturing or producing exported goods as may be specified in this
behalf by the Government by notification in the official Gazette) shall be refunded;
Supply means sale, transfer, lease or disposal of goods in any other manner,
manufactured or produced by a manufacturer or producer or of goods imported, purchased,
acquired or otherwise procured by a trader in exchange of consideration and shall include
the following activities, namely:
o use of goods acquired, produced or manufactured in the course of business for private,
business or any other purpose outside the business;
o auction or disposal off goods in order to repay the debt of any person
o to take under possession of any taxable goods by a person immediately before the
cancellation of his registration;
o clearance or removal of goods from the place of manufacture or production or trading;
o any other transactions specified by the Government by notification;
deemed to have been exported will include following goods or services, namely:o necessary raw-materials, machinery, infrastructure or any other elements for the
purpose of the production, management, transportation or marketing of any such goods
or services which are not appropriate for consumption or use inside Bangladesh and
which have been invested in foreign currency or have been supplied in exchange of
foreign currency repatriated directly from abroad and includes water, electricity, gas,
telephone or any other services used as inputs; and
Backward Linkage Industry means any industrial unit which supplies goods or
services against domestic Back to Back Letter of Credit or domestic Letter of
Credit in foreign exchange to any registered person who is under an obligation in
the domestic Letter of Credit to supply goods or services to any actual exporter in
foreign exchange;
Turnover Tax
Any producer or manufacturer or trader of taxable goods or provider of
taxable service, whose annual turnover less than 80 lac, shall pay
turnover tax at the rate of 3% of his annual turnover.
A person required to pay turnover tax shall have to be enlisted with the
Revenue Officer for the purpose.
Within 30 days of each year after enlistment regarding the amount of
estimated turnover of that year and the manner of payment of tax shall
have to be submitted to Revenue officer.
An enlisted person may pay turnover tax at a time annually, or monthly
or quarterly.
Supplementary Duty
1. Luxury goods, non-essential and socially undesirable goods and the
other goods and services on which levy of supplementary duty is justified in
the public interest, as specified in the Third Schedule and SRO issued by
NBR, supplementary duty at the rate specified in the said schedule & SRO
shall be charged on such goods and services supplied, imported or
rendered in Bangladesh.
2. For the purpose of levy of supplementary duty, the value of goods or
services shall be,In case of imported goods, at time of customs duty payment
In case of produced or manufactured or in case any other taxable
goods, the pon (consideration) charged to the buyer, in which VAT or
Supplementary is not included.
In case of service rendered in Bangladesh, the total amount received, in
which Supplementary Duty and VAT is not included
3. Supplementary Duty shall be payable at same time and in the same
manner as are applicable for the payment of VAT.
4. Supplementary is charged before VAT and VAT is charged after adding
Supplementary value
4. Supplementary Duty is not rebate-able
VAT Registration
Central Registration
Central registration not applicable for manufacturer
Voluntary Registration
A person who is exempted from registration u/s
16 may be registered
Advance trade VAT (ATV) is the amount of VAT which is deducted from
Importer in addition of VAT payment @15% (AV+CD+RD, if any + SD, if
any).
For example, AV = Tk. 10000, CD = Tk. 2000, SD = Tk. 3600; So, ATV =
[(10000+2000+3600)= Tk. 15600] X 126.67% X 4% = Tk. 790.42
ATV is rebate-able
VAT rebate/Credit
Supplier or trader of taxable goods or provider of taxable service may, in every tax
period, take rebate input tax against output tax payable on goods supplied or service
rendered by him.
Valid Challan/documents/BOE
Shall not take rebate in excess of input price mentioned in price declaration
copy (Mushak-1/Mushak-1KHA)
Same tax period or two tax period if there is any valid reason
Drawback shall have to claim within 6 months from the date of export
or deemed export
Govt. may fix rate of drawback of VAT and other duties where
applicable
Input-Output Co-efficient
In some of the cases of goods and services producers and sellers face
difficulties in availing VAT credit/adjustment facilities due to non availability of
invoices from the sellers of input.
In case of service, it is very difficult to determine value addition and inputs for
service
rate for different rates of value addition comes to 2%, 4%, 4.5% and 9% etc.
Semi-govt. Organizations;
Autonomous Organizations;
NGO;
Bank;
Insurance;
Financial Organization;
and
Trader
Trader
VAT is paid in different stages i.e. import stage,
manufacturing stage, wholesale, and Retail. Among of these,
whole sale and retail are considered as trading stage.
Trader means a person who sells or otherwise transfers to
any other person in exchange of consideration any goods
imported, purchased or otherwise acquired by him without
changing its shape, nature, characteristics or quality.
Trader has to take VAT registration as S0.99:00 code
Currently, VAT is paid at trading stage in 3 (three)
types/procedures i.e. (i) actual value addition basis, (ii)
26.67% value addition basis, and (iii) fixed amount for small
trader (package VAT)
Tk.
Tk.
Tk.
Tk.
Tk.
40,000
40,000
32,000
24,000
12,000
Tk.
Tk.
Tk.
Tk.
Tk.
6000
6000
4800
3600
1800
Price Declaration
The registered person shall submit revised price declaration in Mushsk1/Mushak-1Kha/Mushak-1Ga/Mushak-1Gha before seven working days of
price effective to divisional officer
Divisional officer shall inform circle and divisional office computer cell office
VAT Challan/Invoice
VAT Challan/Invoice
Any registered can issue in his own format with prior permission from respective
commissioner office with keeping all information required for Challanpatra as it is.
A copy of credit note shall submit within next working day to Circle Office
Credit note can not be issued for goods supplied or service rendered is
withdrawn because of deterioration of quality standard
Credit note shall be adjusted with current register & shown in monthly return
In case of returned goods or services in full or part, credit note can not be
issued if it is received back/return after 90 days of supply or rendering
Debit Note
Where, after filling a challan or after adjustment to
current register; it appears that a less amount than
actual VAT/SD payable been mentioned, debit note
is issued.
Issue of credit note in form Mushak-12KA
VAT Accounting
Challanpatra book
NBR may issue order for maintaining accounts, issuance challan by using
electronic cash register or computer or any other electronic machine
VAT Return
VAT return shall have to be submitted within 15th day of the month
If 15th day of the month is holiday, then shall have to submit in last working
day before 15th day of the month
Insurance company shall submit VAT return with 20th day of the month
VAT registered person renders service or exports shall submit with return
original copy of treasury challan for VAT paid and any other documents
required by Commissioner
Bandrol
Toilet Soap
Stamp or bandrol used Cigarette, Soft Drinks, Mineral Water & Toilet Soap
can be collected from Security Printing Corporation (Bangladesh) Ltd
without advance payment of VAT prior permission from respective VAT
Office
Bandrol used for Bidi is delivered to Post Office. VAT register can collect
bandrol/stamp with advance payment of VAT
ECR shall have battery back in case of power failure not interrupting
sales
Value Addition
SD Leviable
Value
Tk. 18.50
Tk. 69.00
Value Addition
SD
VAT Leviable
Value
VAT
@15%
MRP
Tk. 6.90
Tk. 75.91
Tk. 11.39
Tk. 100
Tk. 18.50
36.63%
Depot/Trading Stage
Purchase Value
Value Addition
VAT@4%
MRP
Tk. 75.91
Tk. 20.24
Tk. 96.15
Tk. 3.85
Tk.100
Stages
VAT
Manufacturing
Tk. 11.39
Trading
Tk. 3.85
Total
Tk. 15.24
Value Addition
SD Leviable
Value
Tk. 18.50
Tk. 69.00
Value Addition
SD
VAT Leviable
Value
VAT
@15%
MRP
Tk. 6.90
Tk. 75.91
Tk. 11.39
Tk. 100
Tk. 18.50
36.63%
Depot/Trading Stage
Purchase Value
Value Addition
VAT@15%
MRP
Tk. 75.91
Tk. 11.05
Tk. 86.96
Tk. 13.04
Tk.100
Value Addition
Tk. 11.05
14.55%
Stages
VAT
Manufacturing
Tk. 11.39
Trading (Actual)
Tk. 1.67
Total
Tk. 13.04
Power of Adjudication
Adjudication related to the cases of confiscation or levy of a monetary
penalty under VAT Act or any Rules made there under, shall be done:
Nature of Adjudication
(a) Confiscation of goods or
services and impose of
monetary penalty relating to
tax evasion
Empowered Officers
Power
Commissioner
Additional
Commissioner
Joint Commissioner
Deputy
Commissioner
Assistant
Commissioner
Revenue Officer
Divisional Officer
Full Power
VAT Appeal
Any VAT Officer or any person aggrieved by any decision or order given by
a VAT Officer may appeal within 90 days of giving such decision
ADR is the deriving of a resolution with discussion & mutual understanding among relative
parities in a different place, procedure outside of court or customs administration for
disputed VAT maters.
The cases which were evolved before introduction of ADR and under process, tax payer
shall have to apply to Commissioner, Commissioner (Appeal), Appellate Tribunal for
resolution. Pay order for service charge shall have to attach with application along with Tk.
500 non-judicial stamp that the case is yet to be finally discharged. The service charge will
be 50:50 ratio shared by taxpayer (50%) and customs authority (50%). The taxpayer portion
shall have to deposit at the time of application with pay order and customs authority portion
after mutual resolution passed by ADR facilitators. There is 13 members lead and including
a president appointed by Govt. as ADR facilitator committee. Members are usually selected
from renowned business men, expert lawyers, ex-customs officials etc.
If any cases are pending with High Court or Appellate Division of Supreme Court, there is
requirement for permission from court before ADR. The High Court or Appellate Division
can accept the application for ADR with due guideline for related authorities. Generally,
cases are filled to Supreme Court against order of Appellate Tribunal and Appellate Tribunal
is guided by court. After that Appellate Tribunal will send to facilitator of ADR with due
procedure.
The cases which were evolved after introduction of ADR, tax payer can file application for
ADR any cases pending for show cause notice, demand notices, tax determination and
price declaration matters from VAT Office to respective Commissioner. The commissioner
will send the application to ADR facilitator with due procedure completion.
The facilitator shall have to communicate the agreed resolution by 7 working days among
parties.
Contract Manufacturing
Contract Manufacturing
One copy of challan will be issued to contract manufacturer and other copy
will be kept at factory of brand owner
CM declares price for conversion charge received from brand owner and
pays VAT on conversion charge
Brand owner will take rebate for VAT paid for RM/PM procured and VAT on
conversion charge
Brand owner declares price and pays VAT on full value like regular
products
One copy of challan will be issued to contract manufacturer and other copy will
be kept at factory of brand owner
CM declares price like manufacturer including inputs value and pays VAT on
declared value
Contract Manufacturer will take rebate for VAT paid for RM/PM procured
Brand owner declares price and pays VAT on full value at sales points or
depots
Brand owners sales point or depots will take VAT rebate for VAT paid by CM