ASSESSMENT OF NET PAYABLE TAX BY THE TAXPAYER AND PAYMENT
- Manner of assessing net payable tax on supplies and payment thereof.—(1) The amount of net tax payable by a taxpayer for any tax period shall be assessed in the following manner, namely—
- by adding together all of the output taxes and supplementary duty payable in such tax period;
- by subtracting all of the input tax credits entitled to be claimed in such tax period from the summation of taxes assessed under clause (a);
- by adding together all of the increasing adjustments of that registered person in such tax period; and
- by subtracting all of the decreasing adjustments of that registered person in such tax period.
(2) The net payable tax assessed in the process outlined under sub-section (1) shall, in the prescribed manner, be paid by the taxpayer before filing the return for such tax period.
- Input tax credit.—(1) Except as provided otherwise in this Act, a registered person shall be entitled to an input tax credit against the Value Added Tax imposed on a taxable supply or a taxable import, if—
- the import is made in the course of such person’s economic activity and for a taxable supply by such person or is supplied to him; and
- in the case of a supply, such person paid, or is liable to pay, the consideration for the supply.
(2) No registered person shall claim input tax credit, if—
(a) the value of a taxable supply exceeds Taka 1,00,000 (one lakh) only; and
(b) the consideration, in part or in full, against any supply is paid in cash instead of through a banking channel.
- No input tax credit shall be allowed against an acquisition or import, if,—
- such acquisition or import relates to a passenger vehicle, or its spare parts or for the repair and maintenance services of such vehicle: provided that input tax credit may be allowed when dealing in vehicles, renting them out or supplying transportation services are included in the economic activities of such person and the vehicle is acquired for that purpose;
- such acquisition or import relates to entertainment or is used to provide entertainment: provided that input tax credit may be allowed when provision of entertainment relates to such person’s economic activities and the entertainment is provided in the normal course of his economic activities;
- such acquisition relates to a person’s membership or right of entry in a club, association, or society, of a sporting, social, or recreational nature;
- such acquisition relates to transportation services: provided that input tax credit may be allowed when an in-kind supply is made to an employee in lieu of cash and a supply free of taxes under section 40;
- such acquisition relates to a good subject to supplementary duty under special provisions enunciated by the Board under section 58.
- A registered person shall, in support of his claims for input tax credit at the time of filing of returns, be in possession of the flowing documents, namely—
- in case of an import, a bill of entry bearing the name of the importer and the business identification number, and an instrument issued by the Customs Authority certifying that the goods have been cleared for home consumption;
- in case of a supply, a tax invoice issued by the supplier;
- in case of a withholding entity, a combined tax invoice and withholding certificate issued by the supplier.
- The recipient of a supply of an imported service shall not be entitled to claim an input tax credit against such supply unless he includes in the return the output tax payable on the supply of such imported service.
- Every claim of an input tax credit by a registered person shall be made either in the tax period in which VAT is paid or within the two succeeding tax periods, and such claim of input tax credit thereafter shall be time- barred.
- Partial input tax credit.—(1)Where a registered person pays or is liable to pay a part of the consideration for a taxable supply, any input tax credit to which the
person is entitled shall be calculated on the basis of the amount of the consideration such person pays or is liable to pay.
- A registered person shall be entitled to claim input tax credit against an import or acquisition in a tax period; but if he is not entitled to the input tax credit in full, his entitlement to it against his total imports and acquisitions shall be calculated under the provisions of sub-section (3).
- For each tax period, the amount of the input tax credits that may be allowed for the imports or acquisitions to which this section relates shall be calculated according to the following formula:
I x T/A
I is the total amount of input tax originating from imports or acquisitions to which this sub-section relates and for which a credit is sought in such tax period;
T is the value paid by the person mentioned below of all taxable supplies during the tax period; and
A is the value paid by the registered person of all the supplies during a tax period.
- For purposes of this section, the Board may determine—
- which input or inputs shall or shall not be included in the above formula;
- when and how T/A fraction shall be rounded up or down to full number;
- the annual adjustment made at the end of each calendar year;
- the special procedure in relation to receiving partial tax credit by the suppliers of financial services;
- the actual use of any property with the claimed input tax credit in relation to additional adjustments made against capital assets.
- When an adjustment event occurs, a taxpayer may, at such amount, on such terms, within such time and in such manner as may be prescribed, claim adjustments in the following cases, namely:—
- an increasing or decreasing adjustment with respect to withholding tax;
- an increasing or decreasing adjustment applicable in consequence of an annual re- assessment;
- an increasing adjustment for not making payments through banking channels;
- an increasing adjustment for goods put to a private use;
- an increasing adjustment of input tax and VAT on being registered;
- an increasing adjustment on cancellation of registration;
- an increasing adjustment for payment of any interest, monetary penalty, fine, fee, etc;
- a decreasing adjustment in relation to second-hand goods purchased for re-sale;
- a decreasing adjustment in relation to a policy of insurance;
- a decreasing adjustment in relation to a lottery, lucky draw, raffle draw, housie or similar undertakings;
- an increasing or decreasing adjustment for the change in the tax-rate;
- a decreasing adjustment allowed for a negative amount carried forward from a previous tax period;
- a decreasing adjustment allowed for VAT overpaid in a previous tax period; or
- any other prescribed increasing or decreasing adjustment.
- Tax withheld at source and increasing adjustment by withholding entity.—(1) Subject to the provisions of sub-section (2), if a supplier other than a withholding entity makes a supply, which is not exempted or zero- rated, to a withholding entity of a value of more than Taka 10 (ten) thousand under an agreement, tender or work order, the withholding entity shall withhold, at source, not more than one-third of the tax-fraction of that supply from the consideration payable to the supplier.
- If a supplier is not registered or enlisted, and if a combined tax invoice and withholding certificate is not issued, the withholding entity shall not receive any supply from such supplier and shall pay no price against such supply to the supplier.
- A withholding entity shall make an increasing adjustment for the amount of withheld VAT, and shall pay the withheld VAT in such manner and at such time as are specified below, namely:—
- for a registered withholding entity: at the time of filing the return for the tax period relating to the supply on which tax was withheld; and
- for a withholding entity not registered: at the prescribed time and in the prescribed manner.
- For the tax withheld at source and for the deposit thereof to the government Treasury, the withholding entity and the supplier shall be jointly and severely liable.
- Decreasing adjustment by the supplier after the tax withheld at source.—(1) If a tax is withheld at source, the registered person may, in the prescribed manner, make a decreasing adjustment of an amount equal to the amount of money withheld at source.
- The adjustment shall be claimed in the tax period in which the tax payable on a supply is paid or within the next six months after such tax period is over and a claim for such adjustment after such period shall be time- barred.
(3) No decreasing adjustment shall be claimed by a supplier if he does not issue a combined tax invoice, and withholding certificate in favour of the withholding entity.
TAX INVOICES AND OTHER DOCUMENT
- Tax invoices.—(1) Every registered supplier shall, at the date when VAT
becomes payable on the taxable supply, issue, on or before such date, a serially numbered tax invoice containing the following information, namely:—
- the date and time of issue of the invoice;
- the name, address and business identification number of the supplier;
- the name, address and business identification number of the buyer if the value of the supply is more than Taka 25 000.00 (twenty- five thousand) only;
- A description and quantity of the goods supplied, and the actual time and date of such supply;
- the value of the supply (exclusive of VAT);
- the VAT- rate applicable to the supply;
- the amount of payable VAT.
- the summation of the price of supply and the payable VAT; and and
- any other information prescribed by the Board.
No input tax credit shall be admissible against a tax invoice if the information specified in clause (c) of sub-section (1) is not included in such invoice.
The provisions of this section shall not apply where those of section 53 apply.
Credit notes and debit notes.—(1) Every credit or debit note shall include the following information, namely:—
- the serial number of the credit or debit note, and the date and time of its issue;
- the name, address and business identification number of the supplier;
- the serial number, date and time of the relevant original tax invoice;
- the nature of the adjustment;
- the effect on the amount of VAT;
- the name, address and business identification number of the recipient of the supply if the amount of VAT payable on the supply is more than Taka 5 000.00 (five thousand) only; and
- any other information necessary to identify the amount of any increasing or decreasing adjustments because of any adjustment event.
- If a credit note does not contain the information specified in clause (f) of sub-section (1), it shall not be used in support of a claim for any decreasing adjustment.
- Integrated tax invoice and withholding certificate.—(1) A registered person, other than a withholding entity, who makes a supply to a withholding entity shall, on or before the date of making such supply, issue to the withholding entity an integrated tax invoice and withholding certificate containing the prescribed information.
- The form and manner of the integrated tax invoice and withholding certificate shall be prescribed by the Board.
- A copy of the integrated tax invoice and withholding certificate, which is required to be attested by the withholding person, shall be preserved by the supplier along with his other records till such time as may be prescribed by the Board.
- Other provisions relating to tax documents.—The Board may frame rules in respect of tax documents and issuance of copies thereof, and of the terms of preservation, manner and time limits of submission thereof.
IMPOSITION AND COLLECTION OF SUPPLEMENTARY DUTY
- Imposition of supplementary duty.—(1) Supplementary duty shall be imposable and payable on the import of goods, the supply of goods manufactured in Bangladesh and on the supply of services rendered in Bangladesh If they are subject to supplementary duty in Bangladesh.
- Notwithstanding anything contained in sub-section (1), no supplementary duty shall be imposed on an import of a good subject to supplementary duty if such good is imported for export, and not for home-consumption.
- Notwithstanding anything contained in sub-section (1), no supplementary duty shall be imposed on the supply of goods or services that are zerorated under Chapter Three of this Act.
- The amount of payable supplementary duty shall be,—
- if a rate of supplementary duty is specified for the goods or services subject to such duty in column (4) of the Second Schedule, the amount arrived at by multiplying the dutiable value of the goods or services by such rate; or
- if a specific amount of supplementary duty is specified against a good or service, subject to supplementary duty, in column (4) of the Second Schedule, such amount.
- Supplementary duty on the supply of goods or services subject to
supplementary duty shall be payable at only one stage.
- Persons liable to pay supplementary duty.—Every person specified below shall be liable to pay supplementary duty, namely:—
- in the case of import of goods subject to supplementary duty: the importer;
- in the case of supply of goods manufactured in Bangladesh and subject to supplementary duty: the supplier; or
- in the case of supply of services subject to supplementary: the supplier of such services unless otherwise specified,
- The value for imposition of supplementary duty.—For the purposes of imposing supplementary duty, the value of the goods or services subject to supplementary duty shall be as follows, namely:—
- in relation to an imported good subject to supplementary duty, the value that is arrived at adding customs duty and regulatory duty (if any) with the value on which customs duty is leviable under section 25 or 25(a) of the Customs Act: customs duty is leviable:
- in relation to a supply of goods or services subject to supplementary duty, the value of such taxable supply shall be arrived at by deducting the supplementary duty from the value determined under section 32:
Provided that if the supply of any good or service subject to supplementary duty is made without any consideration or with inadequate consideration, the value for imposition of supplementary duty on such good or service shall be arrived at by deducting supplementary duty from the tax fraction of the fair market price of such supply; and
- in relation to any good where VAT is imposed on the basis of retail prices, the retail price described in section 58(2) shall be regarded as the value for imposition of supplementary duty.
- Special schemes for tobacco and alcoholic goods.—(1) For the purposes of imposition and realisation of supplementary duty on the following goods manufactured in Bangladesh and subject to supplementary duty, the Board may, subject to the provisions of this Act or the rules made thereunder, make a special scheme to be complied with by the manufacturers of such goods, namely-
- tobacco products or any other similar product, including products blended with tobacco; or
- alcoholic drinks, ingredients of alcoholic drinks or any other similar product.
- The Board may, by means of such special scheme, set a maximum retail price for the goods, which shall be treated as the value for imposition of VAT and supplementary duty.
- Such special scheme shall include the following matters, namely:—
- matters in relation to the stamps, banderols or special signs or marks of any particular size or design containing security features on the packages, bottles, pots or containers of such goods, or on the bodies thereof, or any other similar matter; and
- matters in relation to the manufacture, acquisition, distribution, preservation, use supervision, observation, accounting, disposal, etc. of such stamps, banderols, or of the special signs or marks.
- Collection of supplementary duty on imports.—(1) The supplementary duty on an imported good subject to such duty shall be collected at the same time and in the same manner as the customs duty on such good is collected.
- Save as otherwise provided in this Act, in relation to an import of goods, for the purposes of collecting and paying the supplementary duty, the provisions of the Customs Act shall (with necessary modifications and adaptations) apply in such a way as if the supplementary duty payable on imports were a customs duty.
- Without affecting the generality of the provision of sub-section (2), whenever any bond or guarantee is demanded under the Customs Act, the amount so demanded shall be calculated in such manner as if the payable supplementary duty were a customs duty on the imported goods.
- Collection of supplementary duty on supplies.—(1) Supplementary duty on the supply of a good or a service subject to such duty shall become payable at the same time when VAT becomes payable on such supply.
(2) Every person liable to pay supplementary duty shall, in the VAT return, includes the information relating to the supplementary duty.
- Presumed supply of goods subject to supplementary duty.—(1) If a
person, who manufactures any good subject to supplementary duty, fails, at the time of an audit, to account for the quantity of such good supplied by him, such person shall be presumed to have supplied such good for a fair market price thereof.
(2) If such goods are destroyed or damaged for any of the following reasons, no supplementary duty shall be payable, namely—
- by fire or any other natural disaster; or
- deteriorated, damaged or finished off without being supplied to a person:
- Decreasing adjustments for supplementary duty.—Any person importing a good subject to supplementary duty may, within such time and in such manner as may be prescribed, make a decreasing adjustment for the supplementary duty paid by him on the import if the good is in compliance with the conditions of a drawback of duties under the Customs Act.
IMPOSITION AND COLLECTION OF TURNOVER TAX
- Imposition and collection of turnover tax.—(1) Every person enlisted or required to be enlisted shall pay turnover tax at the rate of 3 (three) percent on the turnover of his economic activities:
Provided that the amount of the advance tax paid by such person shall be adjusted against such turnover tax.
- The turnover tax payable in a tax period by any enlisted person shall be paid before filing the return for such period.
- Manners in respect of assessment and collection of the payable turnover tax, of keeping accounts, of the refund of turnover tax, of adjudication and of other auxiliary matters relating thereto shall be determined by rules.
FILING OF RETURN AND AMMENDMENTS THERETO
- Filing of return.—(1) Every person, registered or enlisted or required to be registered or required to be enlisted, shall, in such manner as may be prescribed by the Board, file the return for each tax period within a period not exceeding 15 (fifteen) days after such tax period expires.
(2) A VAT return, inclusive of the information on the payment of supplementary duty, shall be filed.
- Late filing of return.—The Commissioner may, on an application made within such time, on such terms and in such manner as may be prescribed, grant a person permission to file a return late, but such permission shall not extend the actual date for payment of taxes beyond more than 1 (one) month or shall not alter the liability to pay interests.
- Amendments to return.—The Commissioner may, on an application made by a taxpayer within such time, on such terms and in such manner as may be prescribed, grant such taxpayer a permission to file an amended return after removing the clerical mistakes and omissions from such return; but the Board may determine the surrounding circumstances on the basis of which a decreasing adjustment may arise as a result of any amendment made under this section and returns may be filed without paying monetary penalty.
- Filing of complete, additional, or alternative returns.—The
Commissioner may, upon serving a notice, pass an order directing a person to file, within such time, on such terms and in such manner as may be prescribed, a complete, additional, or alternative return for a tax period; and similar order may also be passed for such registered person in relation to non-filing of an original return for any specified tax period.