Expectation : Participants & Govt.

The salient features of the Act

 Online system/Automation (Electronic Fiscal Device (EFD) & Software mandatory for
exceeding Turnover Taka 5.00 Crore)
 No need to declare Value (Mushak-1) required to file Input-Output co-efficient in the
prescribed Form.(Mushak -4.3)
 No current account (Mushuk -18). Previous balance of Current Account to be given
decreasing adjustment 10% of net VAT payable of that month if no dispute/case/appeal.
 No advance payment VAT in 1991 Act required positive balance in current account
register (Mushuk -18)
 VAT payment (Mushak 11 & Mushak 18) at the time of supply , now only Tax Invoice (
Mushak 6.3) at the time of supply VAT payment end of the Tax period.
 Tax Invoice copy shall not be sent to VAT authority/Circle office ( 1 copy buyer 2nd copy
to be preserved 05 years)
 Net Tax = Output Tax-Input Tax + Increasing adjustment - decreasing adjustment.
 Input tax credit (Rebate) through Return (9.1)/ Credit in the Mushak 18
 All increasing and decreasing adjustment in Return (9.1)
 Delay submission of return 01 month ( 1% interest U/S 127) and return correction with
in 04 years.
 Every traders and commercial importer must maintain Form 6.2.1
 High value purchase and sales Tax Invoice exceeding Taka 2.00 lac ( Rule 42
& Form 6.10)
 Advance Tax 3% for raw materials & 5% for others U/S 31(2) on taxable import.
Return (9.1) shall be treated as application Form both Refund & Drawback.
 The salient features - Continued
 Quasi – Judicial proceedings & Judicial proceedings.
 2(2) "Offence" means any offence specified in sections 111, 112,113,116 and 117.
 Status qou giving power of Appellate Tribunal.
 Input means 2(18Ka) under this Act
 VAT and Advance Tax payable on same base value at import stage
 All time value is VAT inclusive price under this Act (Product cost – Input =Value
addition as per Act2012 Product cost – Input =Value addition with VAT
 First Schedule – all stage exemption
 SRO – certain stage exemption ( Salt – manufacturing No VAT)
 Commercial Importer – Now Trader – applicable VAT rate – 5%
 Any person/ organization VAT exempted by SRO - 144 has to comply all the VAT
rules U/s 107 and Rules 40

 Mushuk – 7 omitted

 Value of taxable supply = Consideration - Tax fraction

 The salient features - Continued
 Adjustment U/s 48 arisen after sales like sales cancel, goods return,
selling price change or exempted & zero rated.
 Any person(Identical & Similar product) can take central registration
as per prescribed manner U/S 5. Movement of goods or exchange of
services from one unit to another by using Form 6.5 shall not be
treated as supplies and, consequently, there shall arise no output tax
liability or input tax credit claim.
 Fair market value- 10% +/- & authority can change.
 Method of determination
 Comparative method : ( Fresh- Pran- Mum)
 Deductive method : ( Price – some cost)
 Computed method : ( Input + value addition)
 Holistic method
 Objective approximation method : ( Average method)
 The salient features - Continued
 Progressive Supply (continuous supply –Electricity, Water, Gas ) or
Periodic supply (Lease, Hire purchase & installment) U/S 34 & 41
 Sale of running business as going concern U/S 36 – not taxable supply
, before transfer both party give undertaking for future arisen liabilities (
Form - 4.2).
 Partial sale of a running business – taxable supply
 Lay - by – Sales : Hire purchase when installment payment – VAT to be
paid U/s 41
 Transport purchased for staff caring – No Rebate U/s 46
 If any discount allow- consideration will be after discount.
 Supply of sample : Any registered person can make a supply of maximum
Taka 20 (Twenty) thousand as sample in a fiscal year.
 All the VAT registered entity has to issue 6.3 at the time of delivery
whether exempted or zero rated.
 Automatic BIN lock if fail to submit return by the registered entity.
 The salient features - Continued
(2) "Offence" means any offence specified in sections 111, 112,113,116 and 117.

111. Offences relating to VAT registration certificate or turnover tax certificate and
tax invoice, —Whoever dishonestly—
(a) makes or uses a fake VAT registration certificate, turnover tax certificate or
integrated tax invoice and withholding certificate bearing a forged or false business
identification number; or

(b) makes or uses a forged or false tax invoice, credit note, debit note, integrated
tax invoice and withholding certificate;

(c) evades payment of the payable tax otherwise; or

(d) claims a tax refund without such person being entitled to such refund

shall be punished with imprisonment for a term which may extend to 01 (one) year, or with
a fine equal to the amount of tax payable, or with both.
 The salient features - Continued
112. Offence and punishment relating to false or misleading
statement or description.—Whoever dishonestly makes a false or
misleading statement or description in any tax document submitted to
any VAT officer
shall be punished with imprisonment for a term which may extend to 6
(six ) months, or with a fine equal to the amount of tax payable, or with
both.
113. Offence and punishment for obstructions.—Whoever, with a mala
fide intention, obstructs or attempts to obstruct any VAT officer in
discharging his duties under this Act or any rule made there under
shall be punished with imprisonment for a term which may extend to 6
(six) months, or with a fine which may be not less than 10,000 (ten
thousand) taka and not more than 2 (two) lakh taka, or with both.
 The salient features - Continued
116. Offence committed by any company, association of persons or property
development joint venture.—
(1) If an offence is committed by any company or association of persons or
property development joint venture, every director, partner, chief executive,
manager, secretary, official, employee, representative or VAT Agent thereof
having involvement with such offence shall be deemed to have committed such
offence unless he proves that such offence was committed without his
knowledge or he tried his best to prevent the commission of such offence.
(2) A company may be tried and punished in the same judicial proceeding which
is lodged against such director, partner, chief executive, manager, secretary,
official, employee, representative or VAT Agent of such company, but no
imprisonment other than fine shall be imposable upon such company.

117. Assist to commit offence.

 The salient features - Continued
 Mushak 2.1 – Mushak 18.6 total Forms 75 in the VAT & SD Act 2012 & Rules 2016 it was 37 Mushak Forms
(Mushak 1 – Mushak 29 ) in the VAT Act & Rules 1991

 Rebate U/S – 46

 Exceeding 1.00 Lac must pay Banking channel for rebate U/s 46

 Maintenance of Tax Invoice & Other documents Invoice value exceeding Taka 25000 required Name, address &
BIN of (Rule 40)

 High value purchase and sales Tax Invoice exceeding Taka 2.00 lac ( Rule 42 & Form 6.10)

 Adjustment – U/S 48

 VAT Deducted at Source – U/S 49 , SRO 240-Law/2021/163 Mushak (SRO 149-Law/2020/110 Mushak)

 Filling of VAT Return – U/S 64 Form 9.1, Late of VAT Return-U/S 65 , Amendments of Return U/S 66, Filling
of complete, additional or alternate returns U/S 67 (Form 2.5 )

 Refunds without carry forward U/S 69 ( More than 50% export oriented entity)

 SRO (By order of the President) , General Order (By order of the NBR), Special Order (By order of the NBR –
Example- USAID- 17, Asian University for women 15, 11 COVID-19 PPE, Mask ) and Explanations,
The salient features - Continued
 Landed Cost Calculation related with Mushak 4.3
 Assessable value checking SRO 57 dated 23.02.2000 “Import value determination Rule 2000”.
 Standard VAT rate Vs Reduced Rate related with VDS
 VAT exempted Services – 2nd part of 1st Schedule
 SRO 186-Ain/2019/43/VAT scope of Vatable services
 3rd Schedule ( applicable only for local supply)
 Table 1 Part Ka Goods 5% Part Kha Services 5%
 Table 2 Part Ka Goods 7.5% Part Kha services 7.5%
 Table 3 Part Ka Goods 10% Part Kha services 10%
 Table 4 Part Ka Goods Specific Rate Part Kha services Specific Rate
 Heading , H S Code & Service Code – www.bangladeshcustoms.gov.bd
 Reverse charged for service import U/s 20 – Both Input Tax & Output Tax for Importer of service.
 Maintenance of Form, Notice & Records to preserve 05 years U/s 107
 Adjustment U/s 2(87)
 SD – 2nd Schedule total 19 Rates in Import & Manufacturing
(5%,10%,15%,20%,25%,30%,35%,40%,45%,55%,60%,65%,100%,150%,200%,250%,300%,350% & 500%)

 Supply Value/Consideration Taka 100 ( As per VAT & SD Act 2012 supply value is inclusive VAT & SD)
VAT = 100*15/115
=13.04
Value with SD Taka 86.96 (100 – 13.04)
SD @20% = 86.96*20/120
=14.49
Consideration = 100 – (13.04+14.49)
= 72.47
 The salient features
Act -2012
Chapter 01 – Preliminary ( Section 1-3)
Chapter 02 – VAT Registration &
Turnover tax enlistment ( Section 4-14)
Chapter 03 – Imposition of VAT ( Section 15-26)
Chapter 04 – Collection process of VAT (Part Ka - Import
Stage, Kha - Supply , Ga - Special supply)
(Section 27-44)
Chapter 05 –Net Tax assessment & payment ( Section 45-50)
Chapter 06 – Invoice & Return( Section 51-54)
Chapter 07 – SD imposition & collection( Section 55-62)
Chapter 08 - Turnover tax imposition & collection( Section
63)
Chapter 09 – Return submission & correction( Section 64-
67)
Chapter 10 – Negative balance & Refund( Section 68-72)
Chapter 11 – Tax determination( Section 73-77)
Chapter 12 – VAT Authority ( Section 78-89Ka)
Chapter 13 - Audit & Investigation ( Section 90-94)
Chapter 14 – Unpaid Tax collection ( Section 95-106)
Chapter 15 – Forms, Notice & Records preserve ( Section 107-
110)
Chapter 16 – Offence, Adjudication & Penalties ( Section 111-
120)
Chapter 17 – Appeal & Revision( Section 121-125)
Chapter 18 – Miscellaneous ( Section 126-139)
Rules - 2016
Chapter 01 – Preliminary (Rules 1-2)
Chapter 02 – VAT Registration &
Turnover tax enlistment ( Rules 3-15)
Chapter 03 – Imposition of VAT (Mushak Agent, Travel Agent
& Tour operator) ( Rules 16-18Ka)
Chapter 04 – Collection process of VAT (Rules 19-24Ga)
Chapter 05 –Net Tax assessment, payment, deducted at
source & Adjustment ( Rules 25- 38)
Chapter 06 – Accounting of VAT & Turnover Tax ( Rules 40-
44)
Chapter 07 – SD adjustment ( Rules 45)
Chapter 08 - Turnover tax collection( Rules 46)
Chapter 09 – Return submission & correction(Rules 47-51)
Chapter 10 – Negative balance & Refund( Rules 52-57)
Chapter 11 – Tax determination & negation by the
Commissioner ( Rules 57Ka-58)
Chapter 12 – VAT Authority ( Rules 59-65)
Chapter 13 - Audit & Investigation ( Rules 66 - 67)
Chapter 14 – Unpaid Tax collection ( Rules 68-94)
Chapter 15 – Forms, Notice & Records preserve ( Rules 95)
Chapter 16 – Offence, Adjudication & Penalties ( Rules 96 –
97)
Chapter 17 – Appeal & Revision( Rules 98- 108)
Chapter 18 – Miscellaneous ( Rules 109-119)