Vat Ppt Icsb PDF

8/9/2019 Vat Ppt Icsb PDF

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Value-added tax (VAT) is an indirect tax on the supply of goods andservices by a person/entity/VAT registered (VAT payer). It is normallycharged at a flat rate, based on the amount paid for the goods orservices. Usually it is included in the price so that the price you see isthe price you pay. VAT is collected at different stages. VAT is rebatebased system.

What is VAT (Value Added Tax)?

Imposition of VAT: Goods

Services

VAT-able Goods or Services/VAT Exempted Goods or Services?

Goods excluded or not mentioned in Schedule-I of VAT Act

Services excluded or not mentioned in Schedule-II of VAT Act

Other than Schedule-I & II, Govt. declared exempted through SRO time to time


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Rate of VAT (Value Added Tax)? 15%

0%

1. Imposition of Value Added Tax @15%:- All goods imported in Bangladesh except mentioned in Schedule One- All goods supplied except in mentioned in Schedule One- All services provided in Bangladesh except mentioned in Schedule Two

2. Imposition of Value Added Tax @0%:- Export or deemed export from Bangladesh- Supplied goods or services in exchange of foreign currency under any international

agreement or understanding waiving of VAT or SD or both- Goods supplied and consumed outside Bangladesh to any transport moving outside

from Bangladesh


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VAT Act & Rules 1991 Covers

Value Added Tax (VAT):

Turnover Over Tax (TOT) Supplementary Duty (SD)


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What are differences between VAT exempted andzero rated VAT goods or services?


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Important DefinitionInput means: Except land, labor, building, office equipment and transports , all sorts of rawmaterials, any gas, any material used as fuel, packaging material, service, machinery and spareparts;In case of trading-goods- imported, purchased, acquired or otherwise procured in any way forsale, exchange or to transfer in any other manner;

Input Tax means the Value Added Tax paid on inputs imported by a registered person or purchasedby 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 itinto 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 ofsuch 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;


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Commercial Importer means a person who imports goods, other than those specified inthe 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 exchangeof consideration any goods imported, purchased or otherwise acquired by him withoutchanging its shape, nature, characteristics or quality;

Divisional Officer means Value Added Tax officer in charge of a Value Added TaxDivisional Office or an officer not below the rank of Assistant Commissioner assigned todischarge 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 ofValue Added Tax, or any branch put under the discharge of Superintendent of LargeTaxpayers Unit, Value Added Tax or any other office specified by the Board by notificationin the official Gazette;

Zero -rated Goods or Services means goods or services exported or deemed to havebeen 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 beimposed and all other taxes and duties paid on the inputs of manufacturing or producing ofsuch goods (except Advance Income Tax and the Supplementary Duty paid on any suchinputs, used for manufacturing or producing exported goods as may be specified in thisbehalf by the Government by notification in the official Gazette) shall be refunded;


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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 includethe 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 persono 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 goodsor 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 offoreign currency repatriated directly from abroad and includes water, electricity, gas,telephone or any other services used as inputs; and

o goods or services supplied inside Bangladesh against foreign currency as perprescribed rules in the specific condition of not imposing taxes under any internationalagreement or Memorandum of Understanding.


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Consideration means money in total or value measurable in terms of money,received or receivable against the supply of goods or rendering of services;

Commercial Document means books of accounts, files, documents or papersmaintained by a person to record his commercial transaction showing financialcondition of his business, including documents, namely:- debit voucher, creditvoucher, cash memo, daily purchase and sale records, cash book, journal book,bank account and the documents related thereto, trial balance, ledger, financialstatements and notes, profit and loss account, profit and loss appropriationaccount, bank reconciliation accounts, balance sheet and audit report and anyother related document;

Established Exporter means an exporter recognized by the Duty Exemption andDrawback Office on the basis of record of his significant exports and drawbackduring the last 12 months;

Backward Linkage Industry means any industrial unit which supplies goods orservices 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 inthe domestic Letter of Credit to supply goods or services to any actual exporter inforeign exchange;

Contractual Manufacturer means a person who manufactures goods oncontractual basis in exchange of consideration using raw-materials supplied byproprietor of branded goods or using own raw-materials;


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Turnover Tax Any producer or manufacturer or trader of taxable goods or provider of

taxable service, whose annual turnover less than 80 lac, shall payturnover tax at the rate of 3% of his annual turnover.

A person required to pay turnover tax shall have to be enlisted with theRevenue Officer for the purpose.

Within 30 days of each year after enlistment regarding the amount ofestimated turnover of that year and the manner of payment of tax shallhave to be submitted to Revenue officer.

An enlisted person may pay turnover tax at a time annually, or monthlyor quarterly.

Some services irrespective of annual turnover are declared for VAT

through SRO issued by NBR.


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Supplementary Duty 1. Luxury goods, non-essential and socially undesirable goods and theother goods and services on which levy of supplementary duty is justified in

the public interest, as specified in the Third Schedule and SRO issued byNBR, supplementary duty at the rate specified in the said schedule & SROshall be charged on such goods and services supplied, imported orrendered 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 paymentIn case of produced or manufactured or in case any other taxablegoods, the pon (consideration) charged to the buyer, in which VAT orSupplementary is not included.

In case of service rendered in Bangladesh, the total amount received, inwhich Supplementary Duty and VAT is not included3. Supplementary Duty shall be payable at same time and in the samemanner as are applicable for the payment of VAT.4. Supplementary is charged before VAT and VAT is charged after adding

Supplementary value4. Supplementary Duty is not rebate-able


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Base Value for VAT For imported goods, VAT will be payable on;

Assessable Value + Customs Duty (CD) + Regulatory Duty (RD) (if any)+ Supplementary Duty (SD): excluding Advance Income Tax (AIT)

For Supplying goods, value received including input value, all expenses

or applicable cases commission, charge, fee, SD etc. by producer or

manufacturer or business man/trader or commercial importer For services, total payment received from service receiver.

For MRP basis goods, Govt. will determine through Gazette and brand

symbol tagged.

In case of trade discount, value excluding trade discount with condition

that value after discount must be mentioned in Challan and trade

discount must be consistent with general practice.

NBR can determine value (tariff value) inconsideration of general

public importance and eligible


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Timing and Mode of VAT Payment: VAT on imported goods :

At the same time and in the same manner as import duty is paid in accordance withprovisions of the Customs Act and rules made there under

VAT on taxable goods produced/manufactured and supply of goods imported,purchased, acquired or procured in any manner (at the time of any of the followingactivities, whichever occurs first, namely):

- when the goods are delivered or supplied- when an challanpatra (invoice) relating to supply of goods is issued-when any goods are consumed personally or supplied for the use of any other person- when part or full payment is received

VAT on taxable service rendered a registered or register able person (at the time ofany of the following activities, whichever occurs first, namely):

-when the service is rendered-when an challanpatra (invoice) relating to the service is issued

-when part or full payment is received The Board may, in accordance with the procedures by Rules, make provisions forAdvance Payment (i.e. banderol for cigarette), including fixation of the time and

procedure for payment, of VAT, as the case may be, SD, on any goods or services The person who collects or deducts VAT at source in accordance with theprocedure set by the Boards order in this behalf

VAT except in the case of import stage, shall be paid through Account Current andReturn in accordance with procedures set by Rule.


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VAT Registration


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Who shall have to take registration?

A supplier of taxable goods Renderer of taxable services An importer of any goods Exporter of services

Annual turnover 60 lac or more

If any person supplies taxable goods or renders taxable servicesor carries import and export trade from two or more places, heshall have to be registered separately for each place

Only registration shall be required in case of more than onetaxable goods or services

Can a person/entity take more than one VAT registration?


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Central Registration Central registration not applicable for manufacturer

Supply of goods centrally

Rendering of services centrally

Import or export business centrally

Accounts and records maintained centrally Give registration by NBR through general or special order

Submission of list of all sales centers/depots withapplication

No sales center will be included operated by third party oragent

Same books, return and registers required as usual


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If a register able person fails to beregistered, what to do?

The person taxable goods or service salesturnover 80 lac or more but not registered

After due investigation, the proper officer issatisfied that the person is under obligation tobe registered

The officer shall register and inform the person

The effective date of registration from the dateon which the registration became obligatory


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Exemption from Registration

The Govt. may, by general or special order,exempt any person or class of persons fromregistration

Whose amount of annual turnover as receivedor to be received does not exceed the amountfixed, from time to time, by the Govt. bynotification

NBR may, by general or special order, exemptany class of importer or exporter from therequirement of registration


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VAT Registration Procedure Registration shall submit in prescribed form Mushak -6

Application shall have to be submitted to a Divisional Officer or to anoffice, not below Assistant Commissioner

Submit a declaration in Mushak -7, containing particulars ofpremises, plant, capital machineries etc.

Registration certificate to the applicant in form Mushak -8 within 2working days of the receipt of the application

If a person fails to mention the Import Registration No. in column 6 ofform Mushak -6, the Divisional Officer, shall issue VAT registrationcertificate subject to the condition of submission within specified

time/undertaking Other documents for registration; trade license, 2 copies photograph

for proprietor/MD, TIN certificate, Bank A/c certificate, IRC, ERC, plantlayout, land documents/Rental agreement, MOA & AOA etc.

Two sets of application if it is not mentioned in VAT laws


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Changes in VAT Registration If a registered person intends to change the name, address, any other

information or location of business, shall inform Divisional Officer at least

14 days before In case of changing place or situation of business, shall have to submit

Muhshak-9 Before change of place or situation, full VAT payment of VAT or as the

case may be, SD or Turnover Tax

Cancellation of VAT Registration A registered person may, under any of the following circumstances submit toDivisional Office application in form Mushak -10 for cancellation ofregistration;

Refrain from businessTaxable goods or service being declared as exempted from taxFailure to start business after being registered Annual turnover of a registered person being less than 80 lacs

Divisional Officer of VAT if satisfied on recommendation of the Revenue Officerafter necessary investigation may cancel registration


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Advance Trade VAT (ATV) ATV is basically VAT at trading stage. In Bangladesh, it is very difficult to

collect VAT at trading stage. Because, accounting system is not up to thestandard. Moreover, shortage of manpower exists in VAT administration.For these reasons, trading stage VAT is collected at import stage fromimporter. This collected VAT at import stage is called ATV (Advance TradeVAT). Currently, rate for ATV is 4%. The reason for ATV @4% is due toassumption of value addition at trading stage 26.67% i.e. 15% VAT on26.67% value addition means ATV @4% on total value.

Advance trade VAT (ATV) is the amount of VAT which is deducted fromImporter in addition of VAT payment @15% (AV+CD+RD, if any + SD, ifany).

ATV is paid by commercial importer at import stage

ATV is calculated as VAT-able value (AV+CD+RD, if any + SD, if any) plus26.67% value addition on VAT-able value.

ATV: 4% X 126.67% on Value [Assessable Value (AV)+CD+RD (ifapplicable ) + 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


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VAT rebate/Credit

VAT paid on input used in the production of exempted goods; Turnover tax paid inputs procured from a Turnover Taxpayer; SD, paid on inputs , used in the production of goods and rendering of service VAT paid on reusable package at any other time except for the first time; The VAT, paid on such goods and services as are related to the construction, balancing,

modernization, expansion etc.

Various goods and services related to production or supply of taxable goods or rendering oftaxable service, the VAT paid in excess of the rate of VAT on such goods and services VAT paid against expenditure on travel, entertainment, staff welfare and development

activities VAT paid on inputs which are not included/mentioned in price declaration (Mushak-

1/1KHA/Mushak-1GHA) The VAT paid on inputs purchased by the specified service provider as per proviso of sub-

section (4) of section 5; (taxpayer pays VAT on truncated basis)

Input tax paid on inputs purchased by the trader mentioned in sub-section (4a) of Section 5; VAT paid on inputs purchased by a supplier who supplies goods at Tariff Value fixed as per

provision of sub-section 7 of section5 Input tax mentioned in Challan or a BOE without registration number of taxpayer VAT paid on goods remain under the custody of possession or occupancy of other person Inputs on included in Purchase Register (Mushak-16) Inputs with bank guarantee and not resolved

VAT paid on value of Inputs of goods or service is one lac or more than one lac and paidwithout banking or electronically system

VAT rebate can not be taken on following cases:

Supplier or trader of taxable goods or provider of taxable service may, in every taxperiod, take rebate input tax against output tax payable on goods supplied or servicerendered by him.


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Requirements for Taking Rebate

Shall have to submit price declaration

Shall have to pay VAT@15%

VAT rebate taking on inputs shall be included in the price declaration(Mushak-1/Mushak-1KHA/Mushak-1GHA)

Shall have Original copy of documents

Valid Challan/documents/BOE Shall mention Name, Registration number on documents (challan/BOE)

Shall give entry to purchase register (Mushak-16)

Shall give entry Current Register (Mushak-18)

Preserving original documents for 6 years

Shall have inclusion of inputs in Mushak-7

Shall not take rebate in excess of input price mentioned in price declarationcopy (Mushak-1/Mushak-1KHA)

Same tax period or two tax period if there is any valid reason


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VAT Rebate (Credit) If the taxpayer, in spite of having the related documents of inputs in his

possession, if fails, for any reasonable ground, to enter the entireinputs in the same tax period, into the premise of production, deliveryor service rendering, he may, subject to completion of entry of suchinputs his premise, take rebate (credit) on such inputs on any dateduring the next tax period.

The supplier of taxable goods or renderer of taxable service, who alsosupplies non-VAT-able goods or renders non VAT-able service, maytake rebate (credit) of input tax against output tax in proportion to thequantity of inputs used in the manufacture or production of the taxablegoods or taxable service of the total quantity of inputs, as per

procedure set by Rules If tax paid input is damaged or destroyed while preserved or stored at

the place of production or place of rendering service or trading by thesupplier of taxable goods or renderer of taxable service or traderer, theinput tax on the said destroyed or damaged goods shall be disposed ofin the manner set by Rules.


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Partial VAT rebate from Input VATDcKiY wnmve eeZ wKQz mevi wecixZ cwikvwaZ Ki 100% DcKiY Ki

wnmve iqvZ MnY Kiv hvq bv| Gme mevi wK cwigvY DcKiY Ki iqcvIqv hve Zv wbg `Lvbv njv : exgv, Mvm I we`yr weZiYi DcicwikvwaZ g~mKi 80% iqvZhvM|

wbgv cwikvwaZ g~mKi 80% iqvZhvM :- Uwjdvb, UwjwcUvi, d v I BUvibU - dBU divqvWvm - wKqvwis I divqvwWs GRU - Iqvmv

- AwWU, GKvDwUs dvg - hvMvb`vi - AvBb civgkK- wmwKDwiwU mvwfm

- cwienb wVKv`vi- FYc


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Duty Draw Back on Export or Deemed Export

Any registered person shall be entitled to drawback the VAT, SD,

Import Duty, Excise Duty, and all other duties and taxes (except AIT)paid on inputs used in manufacture or production of goods orservices for exports or deemed exports.

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

Any exporter may adjust against output tax payable on goodssupplied or service rendered by him in Bangladesh

Duty Draw Back can be adjusted with CA or claim from DEDO

Difference between VAT Rebate & Duty Draw Back


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Input-Output Co-efficient


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Truncated Base/Fixed Value Addition BasedVAT (Truncated VAT)

In some of the cases of goods and services producers and sellers facedifficulties in availing VAT credit/adjustment facilities due to non availability ofinvoices from the sellers of input.

In case of service, it is very difficult to determine value addition and inputs forservice

Truncated VAT is applicable for 19 services with Truncated VAT rate

Truncated VAT payer can not take rebate input VAT

In order to remove this operational difficulty fixed bases such as 13.33%,26.67%, 30%, and 60% etc. value addition is taken into account for calculation

of VAT for a number of goods and services. In such circumstances net VATrate for different rates of value addition comes to 2%, 4%, 4.5% and 9% etc.

Every year truncated based/fixed value addition is determined through SRO


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VAT Deduction at Source

(VDS)


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VAT Deduction at Source (VDS)

As per u/r 18 Ka (1) of VAT rules 1991, following organizations oragencies are responsible for VDS; Govt. Organization; Semi-govt. Organizations; Autonomous Organizations;

NGO; Bank; Insurance; Financial Organization; Limited Company; and

Educational Organizations

Customer, consumer or purchaser is the main source of VAT. In VDS,certain consumer/customer/purchaser/organizations/agencies havebeen given responsibility to deduct VAT at source from payment incertain cases.

Who is authorized to deduct VAT at source?


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Scope for VDS When procurement of goods/services are done through tender or work

order, VDS is required

VDS is also applicable for purchasing VAT exempted goods or services

VDS is applicable in different rates for 35 specific services mentioned inSRO

If supplier or service provider does not provide challan (invoice), VDS isapplicable from the payment of bills

VDS on License fee, Royalty etc. and import of service?

VDS @15% is applicable on license issue or renewal. VDS will beapplicable/deducted from the person who is enjoying benefit for these

service. VDS applicable from connection fees for water, electricity, gas,telephone or other type connection.

In case of service is delivered from outside geographical location ofBangladesh and service is received within Bangladesh, Bank or any otherfinancial institutions (who is related with payment of bill) shall deduct VDS

@15%.


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What are responsibilities of the personwho is authorized to deduct VDS?

Deducted amount shall be deposited within 15 workingdays after deduction date through treasury challan

Treasury Challan code 1/1133/0000/0311 andCommissionerate office to 0000 code

Certificate issue of 3 copies of Mushak-11KHA within 5working days of deposit

Copy of certificate with original copy of treasury challan

shall be deposited to his registered circle Shall show the amount in Mushak-19

Shall preserve copy of certificate for 6 years


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Trader


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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 toany other person in exchange of consideration any goods

imported, purchased or otherwise acquired by him withoutchanging 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 smalltrader (package VAT)


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Types/Procedures of VAT Payment by Trader

Actual value addition basis: VAT is paid @15% on the basisof price declared/approved in Mushak-1KHA to/by divisionalofficer. Actual value is added with import value or purchase forall cost i.e. transport, electricity, telephone, labor etc. Rebatecan be taken for VAT paid for purchased value or VAT & ATVpaid on import stage.

26.67% value addition basis: If value addition for goodspurchased or imported not more/less than 26.67%, then VATcan be @4% with value addition of 26.67% with purchasedvalue. Price declaration/approval is not required. Rebate can

not be taken for VAT paid for purchased value or VAT & ATVpaid. Fixed amount VAT for small trader: There is a provision for

small trader to pay VAT on area wise highest value additionand minimum lum sum VAT payment as per SRO.


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Fixed amount of VAT for small trader area wise:

Dhaka City Corporation Tk. 40,000 Tk. 6000Chit tagong City Corporat ion Tk. 40,000 Tk. 6000

Other City Corporation Tk. 32,000 Tk. 4800Powro Area of Dist ric t Town Tk. 24,000 Tk. 3600

Other Area Tk. 12,000 Tk. 1800

Small retail trader or shop pay following mentioned VAT amount annually ormonthly installment basis:


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Price Declaration


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Price Declaration for Produceror Manufacturer

Producer or Manufacturer shall submit a declaration related to basevalue including input and output co-efficient of the goods for the purposeof charging VAT or VAT and Supplementary Duty (if applicable) beforesupplying of taxable goods in form Mushak -1.

Shall show input-output co-efficient of goods produced or manufacturing Price Declaration shall have to submit to Divisional Officer

He can supplies, if intends goods or services from the day of pricedeclaration (immediate effect)

In case of revision of price, price declaration shall have to be submitted

before 7 days of effective date of price. Price approval shall be communicated within 15 working days if there is

no queries/objection.

VAT will be paid @15% on VAT levi able value


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Price Declaration for Trader orCommercial Importer

Trader or Commercial Importer shall submit price declaration inMushak-1KHA for the purpose of charging VAT before supplying oftaxable goods in form Mushak -1KHA.

Shall show input-output co-efficient of goods imported or procured

Price Declaration shall have to submit to Divisional Officer He can supplies, if intends goods or services from the day of pricedeclaration (immediate effect)

In case of revision of price, price declaration shall have to besubmitted before 7 days of effective date of price.

Price approval shall be communicated within 15 working days ifthere is no queries/objection.


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Price Declaration for registered person suppliestax-exempted goods or service or exports

If a registered person supplies tax-exempted goods or service orexports or deemed exports tax exempted goods or service (which arenot consistent with input-output co-efficient mentioned in pricedeclaration) side by side taxable goods or service, he shall have tosubmit price declaration in Mushak-1GA.

Price Declaration shall have to submit to Divisional Officer

He can supplies, if intends goods or services from the day of pricedeclaration (immediate effect)

In case of revision of price, price declaration shall have to be submitted

before 7 days of effective date of price. Price approval shall be communicated within 15 working days if there is

no queries/objection. This is not applicable for 100% export oriented or 100% deemed export

oriented registered person.


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Price Declaration for contractmanufacturing

Two party involved one Contract Manufacturer and OtherProprietor Contract manufacturer shall have to submit price declaration for

value/consideration per unit received from Proprietor of goodsin Mushak-1.

At the same time, Proprietor of the goods shall have to submitin Mushak-1 as like producer or manufacturer. Price Declaration shall have to submit to Divisional Officer He can supplies, if intends goods or services from the day of

price declaration (immediate effect) In case of revision of price, price declaration shall have to be

submitted before 7 days of effective date of price. Price approval shall be communicated within 15 working days if

there is no queries/objection.


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Price Declaration for changes or revisionof Price

The registered person shall submit revised price declaration in Mushsk-1/Mushak-1Kha/Mushak-1Ga/Mushak-1Gha before seven working days ofprice effective to divisional officer

VAT will be paid on basis proposed/determined value from effective date

Divisional officer shall inform circle and divisional office computer cell office

Any change/reification of price declaration can not be done without givingreasonable opportunity of hearing

If the price/consideration received from customer not changed and changeof value addition less than 5%, revised price declaration is not required.

Price approval within 15 working days


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Large Taxpayer Unit (LTU) Generally, VAT admin is made on basis of location. Currently, there

is 13 commissioner office and 1 LTU out of these.

Large Taxpayers Unit (LTU) is a tax (VAT/SD) jurisdiction forconsisting of such class of taxpayers with specified limit or class oftax payment (big taxpayers).

Currently, there is 168 tax payers registered at LTU

Minimum annual average revenue payment Tk. 5 crore in last 3years

Minimum 200 VAT registered are included into LTU in terms ofannual highest turnover

There is a committee to LTU for enlisting to LTU All circles, division offices and commissioner office at same premises

Currently, there is a LTU located at Sagunbagicha Dhaka

NBR will set up another one or two


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VAT Challan/Invoice

VAT Ch ll /I i


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VAT Challan/Invoice In VAT system, supplier of goods or services has to provide customers sales

invoice/memo for selling goods or services, is called VAT Challanpatra. VATchallanpatra is known as Mushak-11/11KA/Mushak-11GHA.

Mushak-11 is issued to registered purchaser/customer and Mushak-11KA forunregistered purchaser/customers

Mushak-11GA is transferring RM/PM to contract manufaxcturer

Specilist doctor, Legal Consultant, Immigration Advisor, Coaching Centre, EnglishMedium School, and private medical & engineering colleges issue Mushak-11GHA

In case of import, BOE is considered as Mushak Challanpatra

Any registered can issue in his own format with prior permission from respectivecommissioner office with keeping all information required for Challanpatra as it is.

Every registered person shall issue Mushak-11/Mushak-11KA/Mushak-11GHAwith condition that;

Double challan (more than one challan) can not be issued for a single supply oftaxable goods or sale of taxable imported goods or rendering of taxable services.

Duplicate copy of challan can be issued in case of lost of original challan thatchallan marked distinctly as Copy Only

What are the conditions for issuing VAT Challan?


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Information required for a valid challan Name, address & VAT registration number of tax payer Serial number of challan Name, address & VAT registration number of purchaser/customers Nature of vehicle & number Final destination of goods or services Date, time of issuing challan Date, time of dispatch of goods or services Quantity of goods, SD able value, SD, VAT able value, VAT, and total value Date & time in words Quantity of goods or services in words Double carbonized of the challan

Issue of Challan & submission VAT registered shall issue double carbonized challan 3 copies of challan 1 st copy of challan to customers/purchasers at the time of dispatching of goods or services 2nd copy of challan submit to VAT office within 5 working days 3 rd copy shall preserve for min 6 years Carrying goods in different vehicle, VAT shall be issued for each vehicle separately

In case of own consumption, Vat challan shall be submitted to VAT Office within 72 hours


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What is Credit Note? Cancellation of VAT challan, return of goods & services or adjustment into

Current Register (Mushak-18) or; VAT shown in the challan is in excess of theVAT actually payable

Issue of credit note in form Mushak-12

3 copies of challan are issued

A copy of credit note shall submit within next working day to Circle Office

Credit note can not be issued after expiry of 90 days 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

When Credit Note can not be issued? 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

If goods supplied or service rendered is withdrawn because of deterioration of

quality standard


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Debit Note Where, after filling a challan or after adjustment to

current register; it appears that a less amount thanactual VAT/SD payable been mentioned, debit noteis issued.

Issue of credit note in form Mushak-12KA

3 copies of challan are issued

A copy of credit note shall submit within next

working day to Circle Office

VAT A i


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VAT Accounting (Books & Registers) Accounts book of purchase (Mushak-16)

Accounts book of sales (Mushak-17)

Challanpatra book

Account current book (Mushak-18)

Copies of treasury challan; original copy shall be submitted to circle with 3working days

With permission from Commissioner, computerized books and accountscan be maintained

Separate register for contract manufacturing and for regular manufacturing

Shall maintain accounts of raw materials, services, machinery, spare parts,bills paid, that can be easily audited

NBR may issue order for maintaining accounts, issuance challan by usingelectronic cash register or computer or any other electronic machine


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VAT Return Every manufacturer or producer or trader of goods or renderer of taxable

service shall have to submit monthly VAT return (Mushak-19) to local VATofficer (Circle)

Submission of 2 copies of VAT return (Mushak-19)

VAT return shall have to be submitted within 15 th day of the month

If 15 th day of the month is holiday, then shall have to submit in last working

day before 15 th day of the month Insurance company shall submit VAT return with 20 th day of the month

Manufacturer or producer supplies or exports shall submit documents withVAT return i.e. VAT current register & any documents demanded bycommissioner

VAT registered person renders service or exports shall submit with returnoriginal copy of treasury challan for VAT paid and any other documentsrequired by Commissioner

B d l


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Bandrol It is made mandatory to tag VAT/revenue stamp or bandrol on every pack

or container of goods of specific section of goods which are considered asimportant from point of view of collection of VAT revenue.

Bandrol is mandatory for following goods;

Cigarette

Bidi or hand made cigarette

Soft drinks

Mineral water or purified drinking water Toilet Soap

Security Printing Corporation (Bangladesh) Limited (Gazipur) acts forprinting and distribution of stamp or bandrol on behalf of National Board ofRevenue (NBR)

Stamp or bandrol used Cigarette, Soft Drinks, Mineral Water & Toilet Soapcan be collected from Security Printing Corporation (Bangladesh) Ltdwithout advance payment of VAT prior permission from respective VATOffice

Bandrol used for Bidi is delivered to Post Office. VAT register can collect

bandrol/stamp with advance payment of VAT


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Electronic Cash Register (ECR) Electronic Cash Register (ECR) is an electric device which is for

maintaining and storing VAT(VAT & SD, if applicable)

accounts/records for sales of goods or services Respective Commissioner (VAT) can elect for following service

renderers and large & medium trader situated at all city corporationsand district town for using ECR i.e. hotel, restaurant & fast foodshop, sweetmeat shop, furniture shop, beauty parlor, communitycenter, shopping center, departmental store, general store, otherlarge & medium trader and jewelry shop etc.

ECR shall have battery back in case of power failure not interruptingsales

Inactive or disturbing of ECR machine, VAT register shall inform VATOffice within 24 hours and total demage shall inform within 24 hoursand replace with new ECR machine within 15 days.


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Example for Price Declaration

Product Name: PCNO MRP = Tk. 100 Registered as manufacturer at manufacturing Registered as trader at depot stage

Calculate Manufacturing VAT, Trading VAT, TotalVAT, Value Addition at Manufacturing &

Trading/depot stage: Paying VAT at trading stage @4% (26.67% value addition basis) Paying VAT at trading stage at actual value addition basis

(assume @10%)


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Manufacturer paying VAT at depot/tradingstage @4% (26.67% v alue add it ion basis )

Purchase Value Value Addition VAT Leviable Value VAT@4% MRP

Tk. 75.91 Tk. 20.24 Tk. 96.15 Tk. 3.85 Tk.100

InputValue Value Addition

SD LeviableValue SD

VAT LeviableValue

VAT@15% MRP

Tk. 50.5 Tk. 18.50 Tk. 69.00 Tk. 6.90 Tk. 75.91 Tk. 11.39 Tk. 100

Stages VAT

Manufacturing Tk. 11.39

Trading Tk. 3.85

Total Tk. 15.24

Manufacturing Stage

Depot/Trading Stage

Value Addition Tk. 18.50 36.63%

M f t i g VAT t d t/t di g


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Manufacturer paying VAT at depot/tradingstage on bas i s o f ac tu al value add i t ion

Stages VAT

Manufacturing Tk. 11.39

Trading (Actual) Tk. 1.67

Total Tk. 13.04

Manufacturing Stage

Depot/Trading Stage


InputValue Value Addition

SD LeviableValue SD

VAT LeviableValue

VAT@15% MRP

Tk. 50.5 Tk. 18.50 Tk. 69.00 Tk. 6.90 Tk. 75.91 Tk. 11.39 Tk. 100


Purchase Value Value Addition VAT Leviable Value VAT@15% MRP

Tk. 75.91 Tk. 11.05 Tk. 86.96 Tk. 13.04 Tk.100


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Power of Adjudication

Nature of Adjudication Empowered Officers Power

(a) Confiscation of goods orservices and impose of

monetary penalty relating totax evasion

CommissionerValue of goods or serviceswhen exceeds Tk. 20 lac

AdditionalCommissionerValue of goods or serviceswhen not exceed Tk. 20lac

Joint CommissionerValue of goods or serviceswhen not exceed Tk. 15 lac

DeputyCommissioner

Value of goods or serviceswhen not exceed Tk. 10 lac

Assistant

Commissioner

Value of goods or services

when not exceed Tk. 5 lac

Revenue OfficerValue of goods or serviceswhen not exceed Tk. 1 lac

(b) Impose of monetarypenalty other than those of

clause (a)Divisional Officer Full Power

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:

VAT A l


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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

Appeal to the Commissioner (Appeal), against the decision or order issuedby an Additional Commissioner or any VAT Officer subordinate to him

To Appellate Tribunal against any decision or order issued byCommissioner, Commissioner (Appeal), or any VAT officer of equivalent

rank and status Time of appeal can be extended another 60 days with satisfaction of

Commissioner (appeal)

10% deposit in case of appeal to Commissioner (appeal) & another 10%deposit to Tribunal on basis of decision of Commissioner

Appeal deemed to be granted if not communicated within 2 years from thedate of receipt of appeal.

In case of Price Declaration disapproval/price revision by divisional officerappeal to submit to the Commissioner within 30 days from date of priceapproval

ADR (Alternative Dispute Resolution


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ADR (Alternative Dispute Resolution 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 fordisputed VAT maters.

The cases which were evolved before introduction of ADR and under process, tax payershall have to apply to Commissioner, Commissioner (Appeal), Appellate Tribunal forresolution. 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 willbe 50:50 ratio shared by taxpayer (50%) and customs authority (50%). The taxpayer portionshall have to deposit at the time of application with pay order and customs authority portionafter 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 selectedfrom renowned business men, expert lawyers, ex-customs officials etc.

If any cases are pending with High Court or Appellate Division of Supreme Court, there isrequirement for permission from court before ADR. The High Court or Appellate Divisioncan 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 Tribunalis 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 andprice declaration matters from VAT Office to respective Commissioner. The commissionerwill send the application to ADR facilitator with due procedure completion.

The facilitator shall have to communicate the agreed resolution by 7 working days amongparties.

Unused or un-usable inputs/materials disposal


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Unused or un usable inputs/materials disposal

If any unused or un-usable inputs/materials in manufacturing, VATregistered person shall have to apply in Mushak-26 at VAT circle

office Investigation by Revenue Office within 7 days and forward to

divisional officer for decision

Divisional Office shall give decision within 15 working days

Rebate will be disallowed for that materials

Wastage or by product goods supply and disposal Apply to divisional office

Price declaration for VAT able wastage or by product

Destroy in presence of VAT officer and environment officer etc. if it isnot salable

Report within 7 days after destroy or disposal

Contract Manufacturing


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Contract Manufacturing Contract Manufacturing is the manufacturing process where contract

based manufacturer produces brand names goods/products for theOwner/Proprietor of the brand using the inputs supplied by the owner of thebrand names good or of his own inputs in exchange of consideration/valueof unit from the owner of the product.

Contract based Manufacturer means a contract based manufacturer, inexchange of pon (consideration), using inputs supplied by the owner of thebrand named goods or of his own.

Contract Manufacturer shall submit a price declaration to divisional officerin Mushak-1 for value or pon (consideration) received from owner of thebrand named goods.

The owner of the brand named goods/products shall be considered as theproducer and shall submit the value declaration for the product like regularproduct considering VAT paid on consideration to Contract Manufactureras input.

Mushak-11 GA is issued for transferring inputs (raw materials, packing

materials etc.) from Owner/Producer of the brand to contract manufacturer


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Contract Manufacturing is the manufacturing process where contract

based manufacturer produces brand names goods/products for theOwner/Proprietor of the brand using the inputs supplied by the owner of thebrand names good or of his own inputs in exchange of consideration/valueof unit from the owner of the product.

Contract based Manufacturer means a contract based manufacturer, inexchange of pon (consideration), using inputs supplied by the owner of thebrand named goods or of his own.

There should be a contract between brand owner & contract manufacturer

There are two mode of operations for contract manufacturing:

-Brand owner receives finished goods manufactured by CM at ownfactory premises

-Brand owner receives finished goods manufactured by CM at salespoint or depot instead of own factory premises

Contract Manufacturing

Contract Manufacturing cont


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Contract Manufacturing cont..-Brand owner receives finished goods manufactured by CM at ownfactory premises;

Brand owner shall transfer RM/PM to contract manufacturer throughissuing double carbonized Mushak-11GA challan from own factorypremises.

One copy of challan will be issued to contract manufacturer and other copywill be kept at factory of brand owner

CM declares price for conversion charge received from brand owner andpays VAT on conversion charge

For transferring FG to brand owner, Contract Manufacturer issues Mushak-11.

Brand owner will take rebate for VAT paid for RM/PM procured and VAT onconversion charge

Brand owner declares price and pays VAT on full value like regularproducts

Contract Manufacturer keeps separate books and registers for contractmanufacturing.

Contract Manufacturing cont


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- Brand owner receives finished goods manufactured by CM at sales pointor depot instead of own factory premises;

Brand owner shall transfer RM/PM to contract manufacturer through issuingdouble carbonized Mushak-11GAGA challan directly from procurement.

One copy of challan will be issued to contract manufacturer and other copy willbe kept at factory of brand owner

CM declares price like manufacturer including inputs value and pays VAT ondeclared value

For transferring FG to brand owner sales point or depot, Contract Manufacturerissues Mushak-11.

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 ordepots

Brand owners sales point or depots will take VAT rebate for VAT paid by CM

Contract Manufacturer keeps separate books and registers for contractmanufacturing.

Contract Manufacturing cont..

Documents

Vat Ppt Icsb PDF