Definition Output Tax: Output Tax means VAT.

. Input: Input means raw materials, gas, substance used for fuel, packing materials, services, machinery, spare parts etc.. It does not include labour, building, office e uipment and vehicles. In case of trade input means import, purchase and procurement for ultimate sale, exchange or transfer. Input Tax: Input tax means VAT payable or paid by a registered person on import or purchase from another registered person. Tax Period: Tax period is one month. Turnover: Turnover means total amount received or receivable during a particular period for supply of taxable goods or services. Zero Rated Goods or Services: These are goods or services exported or deemed to be exported or foodstuff on which no VAT or supplementary duty !"#$ is payable. Deemed Export: #eemed export means any of the following activities. a$ "upplies to organi%ations in &'(s or local )**+ export oriented organi%ations or against export ,-. in exchange of foreign currency. b$ "upply of provisions, fuels and other goods to international flights or to foreign bound vessels. c$ "upply of goods or services to international organi%ations diplomatic missions etc. d$ "upplies against international tender in foreign currency made by registered persons in /angladesh. e$ &xport of goods imported on temporary basis in accordance with prescribed rules. f$ 0ishing nets, steel ropes and fuel used in fishing trawlers engaged in catching fishes for exports. g$ The /oard, through ga%ette notification, includes goods or supplies for drawback under conditions against any international agreements. Q. o! and on !"om #$T is imposed %Sec&'(

VAT is imposed 1 )2+ on the value of all taxable goods and services excepting those mentioned in )st and 3nd schedule of Vat Act.. (ero rated goods or services are not taxable. VAT is imposed on the following persons4 5oda Vasi .howdhury 6 .o Page 1 of 21

i$ ii$ iii$ iv$

Importers of goods or services 7anufacturers or producers "ervice providers "uppliers of goods

Q.

o! va)ue is determined for c"ar*in* #$T %Sec&+( In case of import4 Value will be the amount chargeable to import duty including import duty, supplementary duty !"#$ and other duties-taxes excepting AIT. In case supply of goods4 Value will be the amount receivable from buyer including commission, charges, "# and other taxes excepting AIT. 8here input tax is given, value will be the amount on which input tax rebate is availed. In case of supply by registered person4 Value will be the price received or deemed to be received. Incase of sale by a registered person4 Value will be the amount receivable from buyer. 8here retail price is fixed by 9ovt4 Value will be retail price including expenses, commission, charges duty and taxes. In case of services4 Value will be the total amount received. /oard may, by an order or notification, determine actual value added !truncated base$ to impose Vat on that basis !truncated VAT$. 8here trade discount is allowed, value will be the amount arrived after deducting discount. 9ovt. may, in public interest, fix tariff value for charging VAT or "# on taxable goods or services.

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o! does #$T !or,Transaction <aw material sold to manufacturer Value added )**,*** VAT 1 )2+ )2,*** Value added;VAT ))2,*** 'rice sold ))2,*** Page 2 of 21

5oda Vasi .howdhury 6 .o

9oods sold to wholeseller 9oods sold to retailer 9oods sold to ultimate consumer

=>,?@= )?,=A) )=,*>> )B2,3)@

23)? 3,B*A ),A2B 3>,?@3

>*,*** 3*,*** )2,*** ./01000

)22,*** )?2,*** )A*,***

:. 2"at is truncated #$TIn respect of certain services, /oard may imposition VAT on the basis of actual value added instead of total amount received. Thus base for imposition of VAT is known as Truncated /ase and VAT payable or paid on this basis is called truncated VAT. Input tax rebate cannot be availed in respect of truncated VAT but it is availed when VAT is paid on the total amount received !for service rendered$. Q. Define Traders for t"e purpose of imposition of #$T. determined for t"e Purpose of )ev3 of #$T of a tradero! va)ue is

Traders means a person or any organi%ation who, without changing the nature, form or ualities of any goods imported, purchased to otherwise ac uired, puts them on sale, offers in exchange or for supply in any other manner for a consideration. Traders of taxable goods can determine and pay VAT in any of the following methods4 a$ On the basis of )*+ deemed value addition by submitting a declaration about the nature of trade and possible monthly turnover to the concerned divisional VAT officer and adding )*+ as value addition with the value of goods supplied excluding VAT and then calculating ).2+ on the total so calculated as output VAT payable. There is no scope however, in this method to obtain input tax rebate. Cnder this, traders shall have to4 be registered for VAT make declaration related to business in prescribed form to the concerned VAT office within =) Duly of every financial year. )*+ on the value of goods to be supplied excluding VAT shall be added upon which ).2+ shall be calculated as VAT. <ecords of all purchases, sales, current account and challan in 7ushakE)) shall have to be maintained. Tax of every month shall have to be deposited to the treasury within )* of the following month. 5oda Vasi .howdhury 6 .o Page 3 of 21

7onthly returns along with copy of treasury challan have to be submitted within above date in 7ushakE)AA, to the local VAT office.

b$ On the basis of actual value addition4 Cnder this method the traders have toE be registered for VAT purchase price, value addition, VAT inclusive price etc. must be declared in 7ushak E)A, with concerned divisional officer for approval. /ooks and records relating to purchase, sales and tax liability, current account, challan of tax payment etc. have to be maintained properly. .hallan in 7ushakE)) -))A, against every sale has to be issued. Accounts of monthly tax liability have to be submitted in 7ushakE)A to local VAT office. Input tax rebate can be obtained under this method.

Q. 4ention t"e name of five services t"at are exempted from #$T. As per 3nd schedule of VAT Act )AA), out of many other services the following five services are exempted from VAT4 ). Organisation engaged in preparing and cultivating agricultural land 3. &ducation and training institute =. ,ife insurance policies >. "tock and securities &xchange institute 2. 'assengers transport !other than air conditioned buses, launches, railways and rent a car services$. Q. 2"at is 5ustom Tariff va)ueTariff value is the assessable value on which VAT is chargeable directly. In the case of goods under tariff value input tax rebate and turnover tax shall not be applicable. 5owever, "upplier of goods on the basis of total receipts, when buy inputs at tariff or truncated value can obtain input tax rebate for the amount of value added tax mentioned in the .hallan F7ushakE))G. ,et us give an example. A ,td, who manufactures 7. ". products under tariff value scheme paid electricity bill of Tk. )**,*** in a certain tax period. Applying the above, input VAT on the bill paid by the .ompany is )**,*** H 2.**32+I Tk 2,**3.2* which is )2+ on Tk ==,=2* !i.e. ==.=2+ of Tk )**,***$. Jow A ,td. .an obtain input tax rebate at the rate of B*+ of Tk 2,**3.2*ITk=**).2*. Q. 2"at is #a)ue Inc)usive #a)ue- 4ention t"e name of + traders or service providers t"at use #$T inc)usive #a)ue. .ertain traders or service providers prefer to show VAT inclusive price in their invoices or challan without sowing separately the amount of VAT. "ince VAT is not a 5oda Vasi .howdhury 6 .o Page 4 of 21

value addition, rather a tax on it borne by the ultimate consumers and received by the 9overnment, it must be separated from the challan dividing the amount by =-3= or by the factor of ?.BBBB. ). 3. =. >. 2. 5otel and restaurant #ecorators and caterers .onstruction firm 'rinting press Indenting firms.

Re*istration
:. 2"o are re6uired to o7tain re*istration0ollowing persons are re uired to obtain registration under VAT Act, )AA) K "upplier of taxable goods K 'roviders of taxable services K Importers of goods K &xporters of goods or services

:. 8or more t"an one p)ace of 7usiness1 "o! man3 re*istrations are re6uiredAn assessee is re uired to be registered for each place of business where they are more than one. 5owever, if transactions are carried out centrally and books and records are also maintained centrally, central registration may be obtained for one place only. :. 2"om to app)3 for re*istration 0or registration, application !through 7ushakEB along with 7ushak E? 6)2$ is to be submitted to an officer not below the rank of Assistant .ommissioner who will issue the .ertificate of <egistration !7ushakE@$. :. 2"at is t"e e)i*i7i)it3 for re*istration- %Ru)e&/( The annual turnover of the assessee should be not less than Tk. 3,***,***. :. Descri7e t"e procedures for re*istration. Application in form 7ushakEB shall have to be filed with concerned divisional VAT officer for registration, name and address of the organi%ation, taxpayers class, name of goods produced or procured, trade license Jo, TIJ, if available I<.-&<. Jo. !where applicable$ shall have to be mentioned in the application. 0ollowing documents shall be enclosed with the application4 5oda Vasi .howdhury 6 .o Page 5 of 21

a$ Trade license b$ TIJ .ertificate c$ I<.-&<. .ertificate d$ ,ist of all sale centers when applied for central registration. e$ A declaration is to be submitted about land, building, plants and produces-services and principal inputs !7ushakE?$ along with the application. :. Descri7e t"e procedures for re*istration in respect of a ne! assessee. a$ A person should have turnover in excess of Tk 3,***,*** for a continuous period of twelve months. b$ 8ithin thirty days next, the person should apply for registration. c$ In case of new business, application for registration may be made based on estimated turnover of Tk 3,***,*** d$ "ingle registration may be obtained for several taxable goods or services traded from one single place. e$ A declaration is to be submitted about land, building, plants and produces-services and principal inputs !7ushakE?$ along with the application. :. 2"at are t"e advanta*es of centra) #$T re*istrationAdvantages of 9overnment4 a$ .ollection of selling stage VAT in advance at manufacturing stage b$ <eduction of administrative expenses c$ Approval of price from one point d$ .ollection of tax from one point e$ .oncentration at plant and head office only $dvanta*es of Tax pa3er4 a$ Avoidance of administrative hassle b$ Avoidance of the dispute relating to price c$ Avoidance of compilation relating to rebate d$ Cninterrupted production and sales. Q. 2"at is se)f re*istration- 2"at is t"e advanta*e of it.

0or producers or suppliers of valuable goods or services with annual turnover below Tk. 3* ,ac, and for those within the scope of cottage industry, registration is not a lawful re uirement. &ven then if some of them want to register, they can and this is called self registration. The only advantage of registration, whether self or legally imposed, is that the registration producer, supplier or trader can adLust input tax against output tax which can have a significant role in pricing and selling the goods or services. 5oda Vasi .howdhury 6 .o Page 6 of 21

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2"at is compu)sor3 re*istration.oncerned divisional VAT office can register and inform a person under section )2!>$, when does not apply for registration through re uired by law to do so. 5e shall be deemed to be registered from the day condition for his registration becomes apparent. In order words, he would be liable to pay output VAT after allowable adLustment of input tax not from the day of actual registration, but from the day he fulfils the conditions for compulsory registration. Discuss t"e provision re*ardin* cance))ation of re*istration. Sec&./ Any registered person if discontinued his business of supply of taxable goods, services or import of taxable goods or export of taxable goods or services shall inform the concerned officer within )> days of such discontinuance. The concerned officer when satisfied that the person does not have any unsettled liability on account of value added tax or supplementary duty where applicable, shall cancel the registration of that person in the manner prescribed in the rules on the date determined by him. .oncerned officer, when satisfied that the registered person procured registration on incorrect information, shall cancel his registration upon settlement of his liability if any on account of value added tax or supplementary duty where applicable after providing the person reasonable opportunity of hearing. If the annual turnover of any registered person falls below the amount set by the 9overnment under section )B the concerned officer shall cancel the registration of the person in the manner prescribed in the rules and on the date determined by him when satisfied that the person is no more obliged to remain registered under section )2. :. Re*istration re6uirement for accountin* and $udit 8irm and rate of #$T on t"eir Services. The Accounting and Audit firm is re uired to be registered under the VAT Act, )AA) as per normal procedure irrespective of their total income in accordance with the "ection )2 F<egistrationG of the VAT Act, )AA). They will pay >.2+ VAT !)2+ on the value addition of =*+ of the total service charges$ in respect of Accounting and Audit 0irm.

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Pa3ment1 5o))ection or deduction

Q. Descri7e t"e time and mode of pa3ment of #$T %Sec&9( i$ In case of imported goods4 time and method of payment of VAT will be the same as custom duty. 5oda Vasi .howdhury 6 .o Page 7 of 21

ii$ In case of goods manufactured, produced, imported, purchased or collected VAT will be payable at the time of the following which occurs first4 K when goods are delivered- supplied K when challan is issued K when taken for use K payment is received in full or part. iii( In case of service4 VAT will be payable at the time of the allowing which occurs first4 K when service is provided K when invoice relating to service is provided K payment is received in full or part. :. 2"at are t"e contents of certificate of #$T co))ection:deduction- %Sec&9( .ontents of certificate of VAT collection-deduction are as follows4 a$ VAT registration no. of person deducting VAT b$ Total value of service - commission c$ Value of service -commission subLect to VAT d$ Amount of VAT deducted at source e$ Other information as re uired by VAT rules. :. o! #at is paid Ru)e & ;' i$ VAT less current account adLustment is deposited to the treasury before submitting return. ii$ AdLustment is made with current account at the time of preparing challan or delivery of goods. !deduction is made 1=-3= from value added price where 7ushakE)) !Ma$ is applicable. :. 2"at is Supp)ementar3 Dut3 %SD(SDo! va)ue is determined for c"ar*in*

A new duty under the above name will also be imposed under the value added tax ordinance, )AA). The duty will be imposed at varying rates from )2+ to =2*+ on luxury goods imported into /angladesh, nonEessential and undesirable goods produced and supplied in /angladesh and similar services rendered in /angladesh. The goods and services liable for supplementary duty and the rates have been mentioned in the Third schedule of the VAT ordinance, )AA). 5ow value is determined a$ Incase of importN Value will be the amount on which import duty is charged including import duty. b$ In case of manufacture or production, value will be the amount receivable from buyers, excluding "# and VAT. 5oda Vasi .howdhury 6 .o Page 8 of 21

c$ In case of services, Value will be the total amount received excluding VAT and "#. d$ 9oods on which VAT is charged on retail price, value will be that retail price. 7ode and time of payment of "# will be the same as VAT. Q. Is contractor or a*ent of a principa) of a forei*n aided pro<ect )ia7)e to pa3 #$T %Sec&9( If Vat is collected from a service provider of a foreign aided proLect and deposited to the 9ovt, treasury !after deduction by receiver of service or payer of service fee-commission$ and the service provider appoints any subcontractor or agent or any other service provider for rendering that service or part thereof., no VAT will be deducted at source again if documentary evidences !of collection or deduction of VAT and depositing the same to the treasury at the initial stage$ are presented by that subcontractor, agent or service provider. Q. On !"at amount #$T is to 7e paid 73 service rendered as per section +%=( of t"e #$T $ct1 .//.- 4ention exception1 if an31 for pa3ment of #$T 73 t"e service renders. In the cases services, value added tax will be imposed on the total receipts u-s 2!>$ of VAT Act, )AA). 'rovided that in the case of providing any specific service the board by order, will be able to determine the amount of Value Added Tax on the basis of a rate fixed for addition of cost or actual addition of cost.

Turnover Tax
:. 2"at is turnover tax %Sec&>( Turnover tax is the tax an annual turnover of a person or entity. It is applicable in cases where annual turnover does not exceed Tk 3,>**,***. The tax rate is >+ on annual turnover. 'ayers of TOT are not re uired to be registered. :. Descri7e t"e procedure for pa3ment of Turnover Tax TOT Ru)e&= An assessee whose annual turnover does not exceed Tk 3,>**,*** shall pay TOT 1 >+. The procedure for payment of TOT is as follows4 i$ At first an application is to be submitted by the assessee addressing the "uperintendent for enlistment. The "uperintendent shall issue a F.ertificate of &nlistmentG within ? working days. 8ithin ) st =* days of every year subse uent to the year of enlistment, a declaration of proLected turnover and mode of tax payment !7ushakE3$ is to be submitted by the assessee. "uperintendent shall approve or determine after hearing the amount of TOT within =* days next. 5oda Vasi .howdhury 6 .o Page 9 of 21

TOT shall be due from the date of enlistment. ii$ TOT may be paid by a single installment within =* days of enlistment of VAT <eturn iii$ 0orm !7ushakE>$ and original copy of treasury challan to be submitted to the "uperintendent. iv$ )-)3th !monthly basis$ or )->th ! uarterly basis$ of total TOT may be paid within =* days of enlistment. "ubse uent installments should be paid within )2 days of the next month or uarter as applicable. v$ Assessee may apply to the FTurnover Tax .ommissionG for assessment of tax. Turnover of a new assessee, however, shall not be determined by the .ommission. Q. Differentiate 7et!een #a)ue $dded Tax and turnover Tax.

#ifferences between Value Added Tax and Turnover Tax are stated below4 'articulars Value Added Tax Value Added Tax was introduced in /angladesh in )AA). All goods and services provided or supplied or imported into or exported outside /angladesh should be within the VAT net. )2+ on value addition <ebate is applicable for input at output stage <egistered person is entitled to get duty drawback against export <egistration can be done for any amount of turnover Turnover Tax 'erson other than those specified by Jational /oard of <evenue through official ga%ette notification, who produce services but not re uired to register under section )2 of the VAT Act, )AA), and having annual turnover of less than Tk. 3* ,ac shall have to enlist with the superintendent and to pay >+ as turnover tax. >+ on turnover Jo rebate is applicable <egistered person is entitled to get duty drawback against export, even if registered under Turnover Tax. If turnover does not exceed Tk 3* ,ac, any person can register under Turnover Tax.

Introducti on

'ercentag e <ebate #uty drawback Turnover ceiling for <egistrati on

Re7ate1 Dra!7ac, and Refund

Q. 2"ic" *oods and services are entit)ed to dra!7ac,- Sec&.' 9oods and services exported or deemed to be exported are entitled to drawback of VAT, "#, Import duty, other duties and taxes on inputs !excepting AIT and input taxes specified by 9ovt. in an official ga%ette$. 5oda Vasi .howdhury 6 .o Page 10 of 21

Q.

2"at is t"e time )imit for c)aimin* dra!7ac,- Sec&.'

#rawback is to be claimed within six months of export or last partial shipment !through secure and irrecoverable ,. or inland back to back ,. etc.$. #ate of export is the date of submission of /ill of export. Q. 2"at are t"e conditions to 7e satisfied for dra!7ac, of #a)ue added Tax paid on *oods or services used for manufacturin* *oods to 7e exported- Discuss t"e procedure of dra!7ac, of #$T paid on t"e *oods or services. #rawback facility is applicable on VAT, "upplementary duty, import duty and any other duties and taxes paid except advance taxes and supplementary duty on natural gas subLect to fulfillment of certain conditions and procedures4 ? O O O O O is used produce or manufacture exported goods or services is deemed as exported goods or services #rawn back claim in each challan is not less than Tk )** .arrier of goods crossed /angladesh border &xported goods have not been returned to /angladesh 0oreign currency is remitted to /angladesh.

'rovided that the drawback shall be claimed within six months from the date of export or deemed to be exported in issuing of shipping bill, bill of exports, 7ushak challan of final shipment when partial shipment is allowed in the ,-c. Q. 2rite do!n t"e differences 7et!een re7ate and dra!7ac,. The differences between rebate and drawback are given below4 OInput tax paid can be obtained as rebate against output tax payable on the sale of taxable goods or services only. /ut all duties and taxes except advance tax and supplementary duty paid on the exports, direct or deemed as drawback can be drawn back. O only B*+ of VAT paid on the services like telephone, telex, fax, Internet, freight forwarders, .6 0 agents, 8A"A, Insurance, ,-. can be obtained as input tax rebate but the whole VAT paid on those services can be claimed as drawback in case of exports. O Input tax rebate can be obtained within one month of arrival of inputs at the registered place whereas in the case of exports or deemed exports drawback can be claimed within six month of completion of exports. O #raw back cannot be obtained when demand is less than Tk )** per challan but there is no such restriction in case of rebate.

5oda Vasi .howdhury 6 .o

Page 11 of 21

O In the case of drawback input taxes are not re uired to be paid on certain conditions but in the case of rebate, there is no such facility. O /-&, challan in 7ushakE)) or money receipt so treated are main documents in the case of rebate whereas, shipping bill, challan related to deemed export and proceeds reali%ation certificate !'<.$ including those for rebate are considered to be main documents. O In the case of exports, foreign currency remittance against exports to /angladesh is an essential preE condition for drawback but there is no condition like this in the case or rebate. O #rawback in certain cases can be obtained self or from /ank but rebate is always obtained through adLustments in the current account. O Turnover tax payer, supplier of goods or services against turnover challan or on the basis of tariff or truncated value can not obtain rebate. /ut there is no restriction in case of drawback. O <ebate on VAT paid on fire insurance of factory can be obtained but can be drawn back in case of exports, actual or deemed. Q. Discuss t"e provision re*ardin* exemption of #$T 73 t"e @oard 73 t"e Government.Sec&.= The 9overnment, through official ga%ette notification can exempt from value added tax or supplementary duty where applicable, chargeable under this act on any goods or class of goods imported or any service provided, upon compliance to time and conditions stated in the notification. The /oard, through special order can exempt from value added tax or supplementary duty where applicable, chargeable under this Act, on any goods imported, supplied or service provided for the completion of any international contract or bilateral contract on reciprocal basis upon compliance to time and conditions mentioned in the order. :. o! Dra!7ac, is avai)ed in case of export- Ru)e&;>

Any registered exporter unable to obtain rebate of input tax paid on the inputs used in the production, manufacture of goods or services exported by him through adLustment in the current account, shall have to open a bank account in the manner prescribed by the #irectorate when he wants to obtain drawback from it. Any exporter wishing to enLoy the privilege of Festablish exporterG shall have to apply to the department through local value added tax office in form F7ushakE3)G. The #irectorate when satisfied about the export performances of the concerned exporter for )3 months preceeding the date of application, shall enlist as an Festablished exporterG. 5oda Vasi .howdhury 6 .o Page 12 of 21

Q. 2"at do 3ou mean 73 input tax re7ate as mentioned in section / of t"e #$T $ct1 .//.. As per section EA of the VAT Act, )AA), a supplier of taxable goods or taxable services, subLect to the provision in sub section ), will be able to claim credit of input tax against payable output tax which is due on the supply of their produced or manufactured goods or on the supply by them of goods imported, purchased, obtained or otherwise ac uired or on the supply of their services. 'rovided that, in the case of capital e uipment, remission of input tax will be given according to producers prescribed by the rules. Any supplied of taxable goods or services will not be eligible to obtain rebate of input tax which has been paid without the invoice proving that Value Added Tax has been paid on inputs or a bill of entry proving that Value Added Tax has been paid at importation and if any person obtains remission without such proof then the proper officer will be able to cancel the remission and order reconciliation of the current account or on the current tax return. A "upplier of taxable goods or services who supplies upon which Value Added Tax is not chargeable will be able to obtain remission of input tax against output tax in proportion to the purchases which have been used from the total uantity to produce or manufacture goods or services on which Value Added Tax is payable, in accordance with procedures fixed by rule. :. 2"at are t"e conditions to 7e fu)fi))ed in order to c)aim input tax re7ateThe following conditioned are to be met for claiming rebate of input tax4 a$ The Tax payer must have been registered for the purposes of F0ullG VAT, not turnover tax or not VAT based on estimated value addition. b$ The Tax payer must have /ills of entry for imports and VAT invoices !VATE ))$ for local purchases of goods and services, maintained for > years. Jo credit for input tax shall be allowed against turnover tax or VAT based on estimated value addition. c$ The Tax payer must declare the inputs in price declaration including output-input ratio. d$ The Tax payer must claim the input tax within the related year. 5owever, claim for input tax may be allowed after the related year for bonafide reason. e$ The Tax payer must possess the inputs for which input tax has been claimed. f$ The Tax payer can claim credit against VAT only, not import duty, supplementary duty and-or income tax at source. 5owever, an exporter can claim credit against import duty and -or supplementary duty under #uty exemption and drawback P#&#O arrangement under rule )A!>$. 5oda Vasi .howdhury 6 .o Page 13 of 21

:. 2"at is t"e input tax re7ate rate in t"e #$T )a!8ater, Telephone etcEB*+ Insurance, gas and electricity E @*+ :. Discuss t"e provision for re7ate of input tax for stoc, durin* t"e period of introduction of t"is $ct. If there is any stock held by any registered person on the date in which this Act came into force and stock was purchased before this Act was introduced and this input was liable to excise duty and to sales tax or in stock after the introduction of this Act for production or manufacture, the goods which has been brought newly under the purview of Vat and for which VAT is due with the approval of the proper officer at any time fixed under Act will be able to obtain remission of input tax against output tax paid for the purchased input due at the rate and according to the procedure specified in the Act. Q. Discuss t"e provisions under t"e #a)ue $dded Tax Ordinance1 .//. !it" re*ard to re fund. As per secEB? of VAT Act )AA), when any excess amount paid on account of VAT or VAT and "upplementary duty or turnover tax where applicable, due to carelessness, mistake, wrong explanation or other reason can be as refund subLect to the following conditions4 A refund application shall be filed in form T< =) A refund shall be claimed within six months of such tax payment A refund will be adLusted against input tax rebate, if there is any scope for adLustment. The application for refund shall be disposed off by the concerned VAT authority within A* days from the date of application.

Offences and Pena)ties

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Descri7e t"e offences and pena)ties under #$T $ct .//. Sec&'B

i$ 0or making fault in registration, the assessee will be fined for an amount not exceeding T, +01000 with a minimum of T, .01000. ii$ 0or providing false statement in challan or return, for submitting fake documents, for not keeping proper books or for evasion of tax, the assessee will be fined to VAT or "# amount at minimum that may extend up to t!o and "a)f times. In addition to fine , the assessee may be given imprisonment for a period of t"ree mont"s to t!o 3ears on finding guilty in the magistrate court. Offences other than tax evasion may fine of Tk 2,*** that may extend up to Tk =**,*** iii$ In case of failure to submit return or pay tax in due time, the assessee will be liable to pay 3+ excess tax per month 5oda Vasi .howdhury 6 .o Page 14 of 21

iv$ If the assessee does not pay VAT-"# within three month of serving notice or commits offences in !ii$ above twice within twelve months or not compulsorily registered within one month !where it is re uired$, the business will be locked up and registration will be cancelled !if already registered$. vi$ Jo penalty will be imposed unless the assessee is given a reasonable opportunity of being heard.

:. 2"at is t"e conse6uence of fai)ure to deduct #$T at source Section&9 VAT would be collected from person making payment for service-commission with 3+ interest per month. :. 2"at is t"e pena)t3 for fai)ure to deposit t"e deducted #$T Sec&9 The executive officer .&O of the deducting authority will be fined to Tk 32,*** which may be extended to Tk =**,***.

Return and $ppea)

Q.2"at is #$T Return- 2"at is t"e time )imit for su7mission of #$T return&very taxable producer or manufacturer of goods or provider of taxable services must submit to the local value added tax office two copies of a return in form VATE )A for each taxable period before the tenth of the next month following on the taxable period. &very manufacturer or producer or trader of taxable goods and services shall submit his return of a particular tax period within )*th day of the month following the tax period in the prescribed form and manner stating his tax liability thereon. In case of insurance companies, return is to be submitted within 3* th day of the month following the tax period. Q. 2"at documents are to 7e su7mitted !it" #$T return- Ru)e &;= i$ Two copies of 7ushakE)A !VAT <eturn 0orm$ ii$ In case of goods P 7ain copy of current Account and other documents iii$ In case of services P 7ain copy and duplicate copy of treasury challan and other documents. Q. 8i)in* of mont")3 #$T return and t"e re6uired information t"ereon The VAT return will be submitted as per the re uirements of "ection =2 of the VAT Act )AA) and the <ule 3> of the VAT <ule )AA) and in the prescribed FVAT 0orm )AG. The following important information will be re uired to disclose in the said form4 i$ Identification Jumber of the Tax 'ayer ii$ Jame and Address of the Tax payer iii$ Jame of the month !Taxable 'eriod$ iv$ Area .ode 5oda Vasi .howdhury 6 .o Page 15 of 21

v$ vi$ vii$ viii$ ix$ x$ xi$ xii$ Q.

Jame of 9oods - services Jet sale of goods-services subLect to VAT Total VAT 'ayable 'urchase of goods -services from the VAT registered person in /angladesh. Import of goods subLect to Vat. &xport and other rebate of Vat Opening and closing balance of VAT Account Amount deposited into treasury. Descri7e t"e procedure for appea) under #$T $ct&.//.. Sec C =; DDD see Csu**ested ans!er pa*e 90

Q. 2"at are t"e provision u:s '9 !it" re*ard to examination of return su7mitted under section '+1 recover3 or refund of #$T under or over paid The Vat officer has power to examine the return submitted by a person under section =2 of the acts as soon as possible according to procedures fixed by rule and after examination if is found that VAT is less than the VAT which is payable by under this Act then the officer will be able to make a deemed to the tax payer and within seven days of receipt of the order. In the case of goods an adLustment to be made through reconciliation in current account and in the case of rendering services, the officer shall be able to give direction to pay unpaid VAT. If it is found, the person under this Act has paid in excess, then the VAT officer shall give him an opportunity of adLustment against the said excess amount of VAT by order. In a situation where a VAT registered person fail to file return u-s =2 or furnishes wrong information which he has a reasons to believe that the return was filed with wrong information, as a result the paid up amount of VAT becomes less than the due amount or in case of export, the person claims a higher refund which he is no entitle, than the offices concerned, shall, without preLudice to any penal provision contained in this Act, have power to fix the correct amount of VAT or correct refundable amount after giving the person a right to be heard.

#$T $ut"orit3
Q. 2"at is t"e po!er of t"e #$T aut"orit3VAT officer who have been appointed under section ;0 will exercise the powers and perform the responsibilities conferred upon them as given to their subordinate officer. 'rovided that, the /oard by general or special order will be able to determine the area and conditions which it consider fit relating to the application of power and performance of responsibilities under this Act. VAT officers will determine the amount and reali%e VAT, "upplementary duty and turnover tax and perform all other duties regarding this. 5oda Vasi .howdhury 6 .o Page 16 of 21

Q. 5an t"e @oard correct error etc. Sec&== The /oard with its own motion or by an application made by any person within one month from the date of the order shall have the power to correct the prima face mistake or incorrectness of the records of any order passed under this Act. Q. Discuss t"e po!er of t"e Government re*ardin* revie!. Sec&=+ The 9ovt. shall pass such order, as thinks fit, by the application made to it by an aggrieved person and if it is made within > months from the date of order relating to the decision of order passed by the /oard or any order of forfeiture of high price goods or increase of fines or imposition of fines or any such tax not imposed or less imposed. If the 9ovt. satisfied that the appellant was unable to file an application for reasonable causes, the 9ovt. shall allow the applicant to prefer an appeal within the next > months after the said period.

@oo,s and records to 7e maintained

Q. 2"at 7oo,s and records are re6uired to 7e ,ept 73 a re*istered personAs per Section '. $ registered person should maintain the following books and records in the prescribed forms specified by the VAT rule and keep them at the place of business4 K "tatement of purchase of taxable and nonEtaxable goods and services and relevant invoices. K "tatement of supply and export of taxable and nonEtaxable goods or services and relevant invoices K VAT current account K "tatement of deposit of tax to the treasury or to the bank approved by the 9ovt. through challan K #etails of the input stock and the stock of goods manufactured or produced. $s per ru)e ;;, following books are to be kept K 7ushakE)BE'urchase book K 7ushakE)?E "ales book K 7ushakE))E .hallan book K 7ushakE)@E .urrent account book K 7ushakE)A P VAT return form Q. Discuss t"e provision re*ardin* tax invoice under #$T $ct. Sec&';

All registered person will issue serially numbered invoices in the prescribed form and system or as re uired by the announcement by the /oard in the 9overnment 5oda Vasi .howdhury 6 .o Page 17 of 21

9a%ette in any other approved form to this effect for the supply of taxable goods or services or for the sale of taxable imported goods. It may be noted that more than one invoice shall not be issued in the course of each supply of taxable goods, services or each sale of taxable imported goods or services. 2"at is t"e time )imit of protection t"e documents- Sec&'' A registered person who is obliged to preserve records under "ecE=), will preserve those documents for at least four years after that taxable period to which the documents are related. Q.

Q. 2"at are t"e po!ers of t"e @oard re*ardin* ca)) for records and examination of documents.Sec&=' The /oard with its own motion under this Act shall have the power to call for the records 6 examine the documents for the purpose of its satisfaction relating to any records of proceeding, any order passed by the VAT officer subordinate to the /oard. 'rovided that any order of forfeiture of high price goods or increase of fines or such VAT not imposed or imposed but less or, as the case may be, any order of repayment of supplementary duty shall not passed against any person until giving him an opportunity for hearing. The VAT officer shall not be called for any records and examine any documents after the expiry of two years of the order or decision. It may be noted that, any order of forfeiture of high price goods, increase of fines or imposition of fines or such VAT not imposed or imposed but less shall not be passed against any person until giving him an opportunity of hearing.

Price Dec)aration
Q. 2"at is price dec)aration- 2"ere it is to 7e su7mitted'roducers of taxable goods are re uired to submit information relating to their products in accordance with VAT rule = in form 7ushakE). This is price declaration, which shall have to be submitted by any manufacturer or businessman to concerned custom, exercise and VAT divisional office.

Q. 2"at information price dec)aration inc)udesa$ #escription of goods b$ Value of inputs and where applicable, duties and taxes !Other than VAT$ paid on the inputs. 5oda Vasi .howdhury 6 .o Page 18 of 21

c$ All direct and indirect expenses of the organi%ation !Other than income tax$ d$ .ommission, charge fee paid e$ 'rofit f$ Item wise value addition g$ "ale price including duties and taxes. Q. 2it"in !"at time decision on t"e price dec)aration su7mitted must 7e made- o! price once can 7e c"an*ed#ecision on the price declaration must be made within )2 working days of its submission failing which the declared price shall be deemed to be accepted. 8hen declared price is to be changed new declaration in form 7ushakE) shall have to be submitted to the concerned divisional office before ? working days of such change.

Ot"ers
Q. Discuss t"e po!er of t"e Govt. re*ardin* ca)) for t"e records and examine etc. Sec&=B The 9overnment with its own motion or by the application of any person shall have the power to call the records and examine the records of the proceeding of any order under this Act within one year from the date of order for the purpose for being satisfied as to its legality and at the end of such examination, the government shall pass such an order, as it thinks fit to that effect, by correcting the prima face mistake. It may be noted that, any order of forfeiture of high price goods, increases of fines or imposition of fines or such VAT not imposed or imposed but less shall not be passed against any person until giving him an opportunity of hearing. Q.2"at is t"e procedure of searc" and arrest- Sec&+. All kinds of arrest under law or any other rules shall be conducted in accordance with the provisions relating to search and arrest of the code of criminal procedure. Q. 2"at are t"e provisions re)atin* to t"e recover of an3 outstandin* va)ue added tax- Sec&+9 "ection 2B!)$ empowers the VAT officers to recover any outstanding VAT, "upplementary duty and penalty from VAT payer. The officer may recover the outstanding balance in the following manner. a$ The VAT officer may deduct the default VAT from the defaulters any receivable to that VAT office, excise office and income tax office those offices come under the Lurisdiction of the said VAT officer.

5oda Vasi .howdhury 6 .o

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b$ The VAT officer will notify that those office in writing mentioning recovery of default VAT amount for this purpose. They will recover the default amount within seven days after receive the notice. c$ If the concerned person or /ank authority fails to comply with orders mentioned in the notice the arrears VAT shall be reali%able as arrears revenue from the concerned person or /ank authority. d$ The VAT officer may stop delivery of product supply or rendering services from the premises of the VAT defaulter e$ The VAT officer may closedown under lock 6 key the business of the defaulter until the default VAT is received in full. f$ The VAT officer may attach - cease the fixed and floating assets of the default taxpayer and dispose thereof. The reali%ed value will be adLusted against default VAT dues. g$ The VAT officer may also sale any property belongs to the VAT defaulter but remaining in the possession of the person who is under the Lurisdiction of the said office. The sale value will be adLusted against default dues. According to "ection 2B!3$, the VAT officer may advise collector under whose Lurisdiction the default VAT payer possess any property or assets to collect the default VAT from those properties. Q. Discuss t"e provision re*ardin* sa)e of *oods and disposa) of mone3 received on sa)e sec&;/ In case of sale and disposal of money received from sale of the goods except forfeited goods, under this Act provision of section 3*) of custom Act, subLect to any necessary adaptation will be applicable. Q. Discuss t"e provision re*ardin* remission of #$T %Sec&/(. According to "ectionEA a supplier of taxable goods or taxable services within the relevant assessment year will be liable to claim credit of input tax against payable output tax which is due on the supply of their produced or manufactured goods or on the supply by them of goods imported, remission of input tax will be given according to procedure prescribed by the rule. Any supplied of taxable goods or services will not be eligible to obtain rebate of input tax which has been paid without the invoice proving that VAT has been paid on inputs or a bill on entry proving that VAT has been paid at import. If any person obtains remission without such proof then the proper officer will be able to cancel the remission. A supplier of taxable goods or services who supplies goods or services upon which VAT is not chargeable will be able to obtain remission of input tax against output 5oda Vasi .howdhury 6 .o Page 20 of 21

tax in proportionate to the purchases which have been used for the total procedure or manufacture goods or services on which VAT is payable. Q. Treatin* #$T 73 2"o)esa)er and retai)er.

uantity of

The treatment of Vat by whole seller and retailer are provided as follows4 The Value addition of a trade !other than retailer$ is )*+ which shall be added with his purchase price, and thereafter, he shall determine ).2+ VAT on his sales price. The Trader is re uired to keep books of accounts for sales, purchases, supplies, current account etc. to avail this benefit. 5owever, he shall not be allowed any input rebate. The small retailer or shops are re uired to pay yearly fixed VAT ranges from Tk. ),3** to >,3** depending on the location of business establishment and amount of value addition.

Rates of #$T to 7e deducted at source

Provider of Services

SE Fo ) 3 = > 2 B ? @ A )* )) )3 )= )> )2 )B )? )@ )A 3*

7otor vehicles, garage and workshop #ockyard .onstruction firm .onsultancy and supervisory firm 'rinting press Audit and accounting firm <ental transport provider !except taxi cab$ Transport contractor E Others Transport contractors P 'etroleum products 'rocurement provider .leaning and maintenance service of floor, compounds etc. ,essor Indenting firm !on commission only$ "urvey firm !on commission, fees 6 charges$ #irectorsQ fees for attending board meeting Add firms4 other cases "ale of lottery ticketsE on commission Add firm4 /anks, Insurance, companies, J9Os, firms and individuals excepting payments for classified advertisements in Jewspaper "ale of goods on auction /uilding construction firm P sale or transfer of building

#a)ue @ase =*+ =*+ =*+ =*+ =*+ =*+ =*+ =*+ )2+ )2+ )2+ )**+ )**+ )**+ )**+ )**+ )**+ B*+ )*+ )*+

Rate of Fet #$T

>.2+

3.32+

)2+

A+ ).2+ ).2+

5oda Vasi .howdhury 6 .o

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