CARRY FORWARD OF NEGATIVE NET AMOUNT AND REFUNDS
- Carry forward and refund of negative net amount.—(1) If, in a tax
period, the sum of input tax and the receivable decreasing adjustments exceeds the sum of output tax, supplementary duty and increasing adjustments for such tax period, resulting in a net negative payable amount of money, then—
- in relation to an economic activity involving construction, house building, land development, or property development: the excess amount of money shall be carried forward indefinitely and may be deducted in subsequent tax periods in accordance with the provision of this section; and
- in relation to other cases: the excess amount of money shall be carried forward and may be deducted over the following 6 (six) tax periods, after which any remaining excess money shall be refunded in accordance with the provision of this section.
- In relation to an economic activity involving construction, house building, land development or property development, every registered person shall be allowed a decreasing adjustment for an excess amount of money carried forward from the previous tax period.
- Where sub-section (2) does not apply, a registered person shall be allowed a decreasing adjustment for excess amounts of money carried forward from earlier tax periods in the following manner—
- in a subsequent tax period, the amount of tax payable for such period shall be determined by taking into account all output taxes and all adjustments other than the adjustments allowed under this section;
- if the amount of money thus assessed is in the positive,—
- such portion of the excess amount of money carried forward from the earlier tax periods shall be allowed as decreasing adjustments as would reduce the payable amount of money to nil; and
- the excess amount of money carried forward shall be adjusted in a chronological order, with the adjustment for the oldest being made first and the most recent being adjusted last;
- such amounts of money carried forward from earlier tax periods as cannot be adjusted under clause (b), shall be carried forward until—
- all of the excess amount carried forward is deducted for a tax period; or
- a portion or all of the excess amount of money carried forward for a particular period is carried forward for six tax periods.
- If a portion or all of the excess amount of money is carried forward for 6 (six) tax periods without being adjusted,—
- and if such amount does not exceed taka fifty thousand (50,000), it shall continue to be carried forward until it is reduced to nil; or
- such amount of money, in other cases, shall, on receipt of an application made on such terms and in such manner as may be prescribed, be refunded within a period of 3 (three) months.
- Where a person carries on all the economic activities involving construction, house building or property development and other economic activities, all negative net amount of money shall be carried forward in accordance with the provisions of sub-section (2) unless the person is separately registered under section 5 in respect of those construction, house building or property development activities and those other economic activities.
- The Board may make rules prescribing a phased reduction in the number of tax periods for which negative amounts should be carried forward, including directive rules for the phased inclusion of the construction, house building and property development sector in the rules applicable to other sectors.
- Refunds without carry forward of net negative amounts of money.—
- Notwithstanding anything contained in the provisions of section 68, if the amount of money payable by a registered person is in the negative, such person shall be entitled to a refund of such amount if the Commissioner is satisfied that,—
- fifty percent or more of such person’s turnover is or will be derived from zero-rated supplies under Chapter Three;
- fifty percent or more of such person’s expenditure on inputs is on imports or acquisitions used in the manufacture of zero-rated supplies under Chapter Three;
- in other cases, the Commissioner is satisfied that the nature of such person’s economic activity (the economic activity to which subsection (2) of section 68 does not apply), regularly results in excess input tax credits.
- When an application, on the terms and in the manner as prescribed under this section, is made for a refund of money,—
- and if the amount does not exceed taka fifty thousand (50,000.00) only, such amount shall be carried forward as a decreasing adjustment in the next tax period; or
- the Commissioner shall, in other cases, refund the money within 3 (three) months from the date of the application.
- Application of the refunded money.—(1) No refund of money shall be made to a person under section 68 or 69 unless and until the applicant files all VAT returns up to the current tax period.
- If a refund becomes payable to a person, the Commissioner shall apply the refund first in reduction of any outstanding liability of the person for taxes (including interest, monetary penalties, or fines) payable under this Act.
- After application of sub-section (2), if there is a remainder of money and such amount does not exceed taka fifty thousand (50,000.00) only, the Commissioner may choose not to refund the amount and may, instead, accord permission to the registered person to treat the amount as a decreasing adjustment in a tax period determined by the Board.
- Refund of taxes paid by diplomats and other international organisations.—(1) The Commissioner may, within such time, on such terms and in such manner as laid down in this Act or in any rule made thereunder, grant refund of the taxes paid on the following supplies, namely—
- a supply exempted from VAT under any Convention for the time being in force in Bangladesh or any similar international agreement;
- a supply made to any diplomatic or consular mission of a foreign country established in Bangladesh for the official purposes of such mission.
- Exemptions from VAT shall be dealt with by refund, and not by exempting or zero-rating such supplies made to the person referred to in sub-section
- Refund or adjustment of taxes paid in excess.—If a person pays taxes in excess of what is shown as payable tax in the return for a tax period, such excess payments may, within such time, on such terms and in such manner as may be prescribed, be claimed as refund through an application or may be shown as a decreasing adjustment in the next return.
TAX DETERMINATION BY THE COMMISSIONER
- Tax determination.—(1) In the following cases, the Commissioner may,
after giving a person an opportunity of being heard, determine the amount of tax payable by such person, namely—
- if, on examining a return, the Commissioner is not satisfied as to the accuracy of such return or reasonably believes that—
- in such return, the person has made false or untrue statement in respect of output tax, supplementary duty or an increasing adjustment or a decreasing adjustment, or has irregularly claimed an input tax credit or a decreasing adjustment; or
- in a turnover tax return, such person has made a false declaration in respect of his turnover for any tax period;
- if such person fails to file a return within the prescribed time;
- if such person fails to pay the payable tax; or
- if such person has been paid a refund or given a drawback to which he was not entitled.
In the cases specified in sub-section (1), the Commissioner shall, within 45 (forty-five) working days of making a tax determination or an amended tax determination, serve a notice upon such person, which shall, along with other necessary particulars, contain the following matters, namely:—
- the reason for such tax determination, the amount of tax payable as a result of the determination and a description of the basis on which such amount of tax is determined;
- the date by which such tax shall be payable; but such date shall be at least 15 (fifteen) working days after the date on which the notice is served; and
- the time and place of filing appeal against such tax determination. The Commissioner shall not make a tax determination, including an amended tax determination, for a tax period at the expiry of 5 (five) years after such tax period, unless—
- a registered person wilfully neglects or commits a fraud in filing a return; does not file the return for any tax period; or claims a refund fraudulently for such tax period; or
- a registered person, in order to evade payment of taxes, conceals any information, or distorts it, or issues tax invoices with false information or intentionally commits these, or other, offences; or
- an amended tax determination is required to give effect to a decision of a Court, the Appellate Tribunal or the Value Added Tax Authority.
- Nothing in this section shall, in the following cases, prevent a Commissioner from imposing and collecting any interest or monetary penalty, namely:—
- in the case of computation from the original date for payment of the payable VAT, supplementary duty or turnover tax; or
- in the case of computation from the date on which a refund was paid to a person and a tax determination arises in order to make adjustments of such refunded money because such person was paid such refund to which he was not entitled.
- False declaration by the recipient of a supply.—(1) If a supplier mistakenly treats a taxable supply as an exempted or a zero-rated one as a result of a false declaration with an intent to cheat by the recipient of such supply, the Commissioner may, after giving such recipient an opportunity of being heard, make a tax determination against such recipient of such supply for payment of the payable VAT in respect of such supply, including any payable interest or monetary penalty arising out of the late payment of the VAT, and such tax determination shall be treated as a determination of VAT payable by such recipient, whether registered or not.
- The Commissioner shall serve on the recipient of a supply a notice of tax determination which shall, in addition to other necessary matters, contain the following information, namely:—
- the reason for such tax determination;
- the amount of VAT payable as a result of such tax determination;
- the date on which such VAT shall be payable; and
- the time and place of filing appeal against such tax determination.
- Nothing in sub-section (1) shall prevent a Commissioner from recovering the payable VAT, interest or monetary penalty in relation to such supply from a supplier, and from recovering a portion of the payable amount from the supplier and the other portion from the recipient.
- If a supplier pays to the Commissioner, as a result of any fraudulence or a false statement made by a recipient of a supply, an amount of VAT, interest, or monetary penalty for such supply, he may recover the amount so paid from the recipient of such supply.
- False statement by supplier.—(1) Where a person who is not registered makes a supply of a good to the recipient of a supply and issues a false document purporting to be a tax invoice, which makes such supply appear like a taxable supply, such supply shall be treated as a taxable supply, and if such person is registered, the applicable rate would be the rate that would have been applicable to such supply:
Provided that if a higher rate is shown on, or is understood from, the documents, such higher rate shall be applicable.
- The Commissioner shall, after giving such person an opportunity of being heard, treat such person as a registered person and make a tax determination treating such supply as a taxable supply.
- Grant of tax benefit or its negation.—(1) If a person takes or expects to take, through any scheme, by misusing any of the provisions of this Act, a tax benefit, whose sole or principal purpose is to take such tax benefit, the Commissioner may, after giving such taxpayer an opportunity of being heard, in specified cases and manners, pass such reasonable order for assessing the accuracy, determination, negation or curtailment of such benefit and fix the responsibility of the beneficiary as if the particular proposal was not accepted or not made effective.
(2) For the purposes of this section, “Scheme” includes a course of action and an agreement, arrangement, promise, plan, proposal, or undertaking, whether express or implied and whether or not legally enforceable.
- Admissibility of tax determination notice.—(1) Every original or attested copy of a notice of tax determination shall be so admissible in a proceeding as a conclusive proof that the determination has been duly made and, except in proceedings in relation to tax determination, that the amount and all particulars of the determination are correct.
- No tax determination made or executed may be quashed or deemed to be void or voidable for not being made or executed in the prescribed forms.
- No tax determination shall be affected or impaired for any omission, or mistakes or defects therein, if it is in conformity with this Act, and the name of person assessed or on whom tax may be imposed is cited in such notice according to common understanding.
VALUE ADDED TAX AUTHORITY
- Value Added Tax Authority and officers thereof.—(1) For the
purposes of this Act, there shall be an authority to be called the Value Added Tax Authority, which shall be constituted with the Board, one or more Value Added Tax Offices thereunder and the officers specified below, namely—
- Chief Commissioner, Value Added Tax;
- Commissioner, Value Added Tax;
- Commissioner (Appeal), Value Added Tax;
- Commissioner (Large Taxpayers’ Unit), Value Added Tax;
- Director- General, Central Intelligence Cell;
- Director- General, Audit, Intelligence and Investigation Directorate, Value Added Tax;
- Additional Commissioner or Additional Director- General, Value Added Tax;
- Joint Commissioner or Director, Value Added Tax;
- Deputy Commissioner or Deputy- Director, Value Added Tax;
- Assistant Commissioner or Assistant Director, Value Added Tax;
- Revenue Officer, Value Added Tax;
- Assistant Revenue Officer, Value Added Tax; and
- any other officer appointed by the Board.
- The Board may, by a general or special order published in the official Gazette, appoint the VAT officers, determine their local jurisdiction and specify the responsibilities, duties, powers and functions of such officers under this Act or any rule made thereunder.
- The Board may, by a general or special order published in the official Gazette, constitute, either for the whole or for any specific area of the country or for any specific class of taxpayers, one or more large taxpayers’ units and appoint necessary numbers of officers thereto, and prescribe the rules of functions of such units.
- Duties and responsibilities of the VAT Authority.—(1) The Board shall, under the provisions of this Act, carry out all the functions, including the policy making functions, and discharge all the duties and exercise all the powers of the VAT Authority.
- The VAT officials shall perform, while remaining under the control, surveillance and supervision of the Board, all or any of the functions, discharge all or any of the responsibilities and duties, and exercise all or any of the powers described below, namely:—
- tax collection and activities relating to keeping accounts thereof;
- application of the provisions of this Act and the rules made thereunder and administrative functions ; and
- any other function or duties and responsibilities assigned to them by the Board to carry out the purposes of this Act.
- Subject to such limitations and conditions as may be determined by the Board, by a general or special order, the VAT officers shall, under the provisions of this Act or the rules made thereunder, perform all—
- such functions, discharge such responsibilities and duties, and exercise such powers as may be bestowed upon them; and an official junior in rank and status shall perform all such functions, discharge all such responsibilities and duties, and exercise all such powers as may be given by an officer senior in rank and status to such official; and
- such functions, discharge such responsibilities and duties, and exercise such powers through an arrangement whereunder a senior officer may perform all the duties and responsibilities of a junior officer.
- Power of the Board to amend or alter an order or decision of a VAT —The Board may, suo moto, call for, in such manner and within such time as may be prescribed, the records of any proceeding or any order passed or any decision taken by any VAT officer for scrutinising the accuracy of such proceeding, order or decision, and may, after such scrutiny, pass such reasonable order as it deems fit:
Provided that the rights or liabilities of any person determined under this Act shall not be affected by such order.
- Delegation of Power—(1) The Board may, by a notification in the official Gazette and subject to such limitations or conditions as may be specified in such notification, delegate to any VAT officer, by name and designation, any responsibility, duty or power of a Commissioner under this Act or the rules made thereunder.
- Unless the Board otherwise directs, a Commissioner or a Director- General may pass an order giving any VAT officer subordinate to him the authority to exercise any or all of his powers in all or any part of the jurisdiction of such Commissioner or Director- General.
- Assistance to VAT —(1) All members of the Police, Border Guards Bangladesh, Bangladesh Coast Guards, and Ansars; and the authorities of all Union Parishads, Upazila Parishads, Municipalities, Zila Parishads, City Corporations; and all the government officers, including the officers administering and controlling the functions relating to Excise, Customs, Income Tax and Narcotics; and all bank officers shall render assistance to the VAT officers in discharging their duties under this Act or any the rules made thereunder.
- A VAT officer not below the rank of an Assistant Commissioner may, for the purposes of taking assistance, request any member, authority, officer or any other person specified in sub-section (1) to provide any information, including the accounts of any movable or immovable property of any person, statements of bank accounts or other documents of any person, and such member, authority, or officer, if so requested, shall remain obligated to furnish such summoned information.
- Power to enter and search by VAT —(1) To carry out the purposes of this Act or the rules made thereunder, a VAT officer not below the rank of an Assistant Commissioner, having been authorised by a Commissioner, may, in the prescribed manner, exercise any of the following powers, namely:—
- to enter into any place or premises of any economic activity or into any house, transport, etc. and make search therein; and
- to inspect any economic activity and examine its records, files, documents and accounts.
(2) If the place specified in sub-section (1) be a place of abode of any person, it shall require such officer to serve, in the prescribed manner, a notice
upon the owner or the person-in-charge or supervisor of such place and no such entry shall be made during the period from sunset to sunrise.
- If any person contravenes any provision of this Act or any rule made thereunder, a VAT officer of the rank of an Assistant Commissioner and above may, in the prescribed manner, request the concerned bank authority to freeze the bank account of such person.
- Seizure of goods and disposal thereof.—(1) If any person makes any supply or renders any service in violation of any provision of this Act or any rule made thereunder, the Commissioner may, in the prescribed manner, seize and dispose of such goods or the goods related to such service
- During the pendency of a proceeding, the Commissioner may, in such manner and on such terms as may be prescribed, order for ad-interim release of any good seized under sub-section (1) to the owner of such good or his representative.
- Imposition of monetary penalty for non-compliances or irregularities.—(1) The Commissioner may impose a monetary penalty specified in column (3) for the non-compliances or irregularities specified in column (2) of the following TABLE, namely:—
Non-compliance or irregularity for not issuing tax invoice, credit note, debit note, combined tax invoice and withholding certificate; Non-compliance or irregularity for not keeping records in the prescribed manner; Non-compliance or irregularity for not furnishing fixed security;
Irregularity for willingly evading or attempting to evade assessment and payment of taxes;
- Save and except any offence or any non-compliances or irregularities specified in sub-section (1), if any person fails to do anything he is required to do under any of the provisions of this Act or the rules made thereunder, or does anything he is not permitted to do, then the Commissioner may, considering the gravity and frequency of commission of such act of non-compliances or irregularities, impose, in the prescribed manner and of a prescribed amount of monetary penalty on such person.
- Nothing in this Act shall prevent a Commissioner, if there are elements of crime and of non-compliance or irregularity in any incident, from lodging a criminal case for the element of such crime and initiating a proceeding for the element of such non-compliance or irregularity.
- Every Commissioner shall, before imposing a monetary penalty under this section, issue a notice to give the concerned person an opportunity of being heard.
- The monetary penalty imposed shall be payable as additional to VAT, supplementary duty, turnover tax, interest, or fine.
- Monetary limits of the VAT officers in initiating a proceeding for adjudication.—(1) To carry out the purposes of this Act or the rules made thereunder, or for the imposition and collection of taxes,—
- in relation to imports and exports, the Customs Officers shall initiate proceedings in accordance with the provisions of the Customs Act;
- in relation to supply of goods or services, the VAT officers shall, subject to the monetary powers specified in the following TABLE, initiate proceedings under the provisions of this Act, namely:—
|(a)||Commissioner or Chief Commissioner||value of the goods or services exceeding Tk. 20 (twenty) lakh only|
|(b)||Additional Commissioner||value of the goods or services not exceeding Tk. 20 (twenty) lakh only|
|(c)||Joint Commissioner||value of the goods or services not exceeding Tk. 15 (fifteen) lakh only|
|(d)||Deputy Commissioner||value of the goods or services not exceeding Tk. 10 (ten) lakh only|
|(e)||Assistant Commissioner||value of the goods or services not exceeding Tk. 5 (five) lakh only|
|(f)||Revenue Officer||value of the goods or services not exceeding Tk. 2 (two) lakh only:|
Provided that the proceedings, which do not have any financial involvement, that is, proceedings of irregularities, shall be initiated and disposed of by specified VAT officials.
(2) Every VAT official shall, in each proceeding taken up under the
provisions of this section, provide the concerned person an opportunity of being heard through service of a notice upon such person.
- Power to summons.—(1) An officer of VAT, not below the rank of a Revenue Officer, may, requiring to take any action under the provisions of this Act or the rules made thereunder, issue summons to any person for standing as a witness or presenting any document.
(2) The person so summoned under sub-section (1), shall be under
compulsion to appear as per the direction of the VAT officer either in person or through an authorised representative:
Provided that no summons shall be issued to a person, who is exempted from appearing in person, under sections 132 and 133 of the Code of Civil Procedure.
- Powers and functions of the Customs Officers.—(1) Every Customs Officer, in applying, and giving effect to, any provision of this Act or any rule made thereunder, shall have the following responsibilities, namely—
- to collect VAT imposed on taxable imports; and
- to collect supplementary duty payable on imports of goods subject to supplementary duty.
(2) A Customs Officer shall be entitled to exercise the powers conferred upon him by the Customs Act in such a manner as if the provisions of
imposition of Customs duty on an importable good under the Customs Act is applicable to the VAT and supplementary duty imposed under this Act.
- —Subject to the provisions of the Right to Information Act, 2009 (Act No. 20 of 2009), all the information, received from any taxpayer in giving effect to the provisions of this Act, shall be treated as confidential.