Hi,

I wonder if you have information about Free Trade Agreements andor any other Trade Agreements that are effective between Bangladesh and foreign countries (Bangladesh-Bhutan, Bankok Agreement, SAPTA, etc ...).

Do you provide such information?  If not where could we find it?

thanks for your precious help

Yes, Bangladesh has some FTA. But these services are presently not available here. Sorry for inconvenience.

You have to contact Customs Authority.

Address:

Customs Wing

National Board of Revenue (NBR)

Segunbagicha, Dhaka - 1000

Bangladesh

If we submit Form VAT-1GHA  for price approval at our Factory Stage , then -- any necessary to pay VAT to our Depot Stage. (Our MRP is fixed). We are paying VAT  on 23 of MRP process

I am not getting reference of VAT on House Rent. When it was introduced and the process of paymentdeduction of VAT on house rent.

Please see the SRO no. 200Ain2010549-VAT, Date: 100610. Service Code: So74.00

It was introduced from 10 June 2008.

The person take rental space for commercial use is responsible to add 15% VAT with the rental charge and deduct and deposit to the treasury.

Ans 1: As the electricity is the trancated based service, according to the proviso of section 6(4Gha), you have to deduct whole amount of VAT at truncated rate.

Ans 2: As the Telephone is not the trancated based service, according to the section 6(4Gha), you have to deduct 3% of of total consideration as VAT.

Ans 3: This is an administrative problem. Legaly you are right. You can take an instruction from the NBR to solve such administrative problem.

VAT exempted at import stage

Assessable  Value  100

Add: VAT               0

Add VAT (ATV)     3

Selling price           130

Value addition          30

Output VAT             4.5

Price of the product including VAT is 134.5

VAT not exempted at import stage

Assessable  Value  100

Add: VAT               15

Add VAT (ATV)     3

Selling price           130

Output VAT         19.50

Price of the product including VAT is 149.50

Please confirm the above understanding.

VAT exempted at import stage

Assessable  Value  100

Add: VAT               0

Add VAT (ATV)     3

Selling price           130

Value addition          30

Output VAT             19.5

Price of the product including VAT is 149.5

Credit                    3

Net VAT               16.5

Total VAT Incedence 3 + 16.5 = 19.5

VAT not exempted at import stage

Assessable  Value  100

Add: VAT               15

Add VAT (ATV)     3

Selling price           130

Output VAT         19.50

Price of the product including VAT is 149.50

Net VAT          1.5

Total VAT Incedence 15 + 3 + 1.5 = 19.5

 This is the art of VAT.

Thank you for your kind support. Request you to provide your response to the following question:

As per VAT Act 1991, an importer of service is liable to pay VAT. Say for example, the service provider has submitted an invoice for Tk 100,000. Do the importer of service required to pay VAT on Tk 100,000 i.e., Tk 15,000 then the banker will remit Tk 100,000 or The banker will deduct Tk 15,000 and remit Tk 85,000?

Your example is tax exclusive base. You will deduct 3% of VATable value as VAT. This not a rate which is popolarly misunderstood.

Your base is Tk. 100. So deduct 3% of base Value. The amount of ductable VAT will be Tk. 3

Please findherewith the following quaries & make me confirm:

Particulars                   VAT Rate                             

Printing Press               15% or 4.5% ?(Explanation)

Advertisement in Newspaper              ?

Advertisement in Newspaper Agent    ?

Procurement provider     3% or 4%    ?

1)Highest rate of Supplementary Duty ?

Printing Press               15%

(service does not listed in the truncated base sro is taxed @ 15% under section 3 of VAT act)

Advertisement in Newspaper              15%

Advertisement in Newspaper Agent    15%

Procurement provider     4%

1)Highest rate of Supplementary Duty  500%

Would you please provide information between special bonded warehouse & bonded warehouse? 

There are two types of Bonded warehouse.

(i) Special Bonded warehouse: Bonded warehouse for 100% export oriented garments industries like, Oven garments, knit garments and sweater industry.

(ii) General Bonded warehouse: Bonded warehouse for any 100% export oriented industry other than special bonded warehouse are the General Bonded warehouse. GBW has been further divided into many categories like B2B accessories (deemed), diplomatic, home consumption, shipyard, etc.

1. Same company has two different bonded warehouses at different place. Can inventory be transferred inter bonded warehouse for own factory?
2. One company has bonded warehouse. Finished goods have been transferred from such company to customer using another place for warehouse in order to easy shifting. Is it comply the law”   
3. If answer no, any permission is to be taken?

Ans1: With prior permission, you can do so.

Ans2: No, it does not comply the law.

Ans3: It should be treated as final supply. You can take written permission from your regulating authority.

1.If a company supply ETP (Effluent Treatment Plant) to EPZ or 100% export company what will be VAT rate?

2. If a company supply ETP (Effluent Treatment Plant) to any company  other than EPZ or 100% export company what will be VAT rate?

1. Zero rate. It should be treated as export.

2. 15%. The company receiving service will get drawback or credit for export. Probably, you are telling about the service code S021.00

We paid supplementary duty @20% on Import stage.
Do we need to pay more supplementary duty @20% on sale of that product

Product name: Lipbum
H.S Code: 33.041.000

What % deduction at source against the head

Repair and Maintence

1. If you get/issue Mushak-11 challan showing 15% VAT against supply, the withholding entity will deduct 3% as VAT on the VATable value.

2. If you do not get/issue Mushak-11 challan showing 15% VAT against supply, the withholding entity will deduct 15% as VAT on the VATable value.

VAT = VAT inclusive Value/VAT Factor*

         = 1,47,000/26

         = 5653.85

* VAT factor = VAT inclusive Value/VAT Rate

                      = (100+4)/4

                      = 104/4

                      = 26

 Here, VAT rate is 4%

                        Applicable Rate       Deductible Rate

House Rent :            9%                             9%

Audit Fee:               15%                             *3%

Repair mtnce           15%                             *3%

Carring (petroleum)  2.25%                         2.25%

Carring (other)         4.5%                           4.5%

Printing                    15%                             *3%

* In thiese cases, supplies would be accompanied by the VAT Invoice showing 15% VAT. Otherwise, whole 15% would be deducted at source.

I am Silica Gel packet (1gm) manufacturer. I sell Silica gel packets to pharmaceuticals directly. Pharmaceuticals get rebate the VAT which I give.

If I sell to a trader who will buy from me with VAT and will also sell to pharmaceuticals with VAT, will he be able to get rebate the VAT which I will give to him?

Ans.1: X is not manufacturer. He is proprietor of goods. See Rule 2(1)(JhaJha). He has to pay 15% VAT and declare value to Divisional officer if he wants to get input tax credit that paid to Y (i.e. Contract Manufacturer, [Rule 2(1)(khakha)]).

Ans.2: Yes. In this case he is a trader. He may pay 2% VAT, but in this case, he will not get credit.

Ans.3: No, he can't do this as per law. But, you know, this is widely practiced though it is not in the line of legal provision. Declared price should be actual price at which the good is sold. See section 5(2).

Sorry, your calculation is not correct. Before calculation, you have to know defination of two services related to auction. First: Buyer of auctioned goods (So60.00) and Second: Auctioner (Soo9.00). Auctioner is the person who arrange the auction activity. This person is not required in all auction. This is required in Customs auction. Because, they have to arrange huge amount of auction each month.

Now come to your calculation. I assume that you do not appoint any professional auctioner for your action. You do it by yourself. The the calculation is:

Sale value                 = 100/-

VAT @ 3%             = 3/-

Total recievable        = 103/-

(This service does not incleded the income tax, thus no comment on AIT) 

Dear Sir,

Ans (a): BCT means BANGLADESH CUSTOMS TARIFF

Ans (b): Follow the link of customs of this site. http://www.taxguidebd.com/national_tariff.php

Ans (c) : Kg

Ans (d): HS Code: 83111000

Ans. 1: Yes for manufacturing sector.

Ans. 2: Yes

Ans. 3: Valid VAT invoice or Bill of Entry (for imports)

We want to Sell Furniture in Dhaka, Please advice what is the Current Customs Duty and Other Taxes which a Company has to pay from Dhaka for Importing Furniture. Say 100 is the value of the Goods. Could you give in a break up how much the importer will be paying in terms of Duties and Taxes..The HS Code is 9403-3090.

Your HS Code is not correct. The present BCT does not contain this HS Code. Furnitures are classified under heading 9403 having 10 HS Codes. All thise codes (lines) has the total tax incident of 90.02% tax including CD, RD, VAT, AIT, ATV.

Please visit the link http://www.taxguidebd.com/national_tariff.php for detail. You can search the tax incident by HS code or by key word

It should be. But as per present VAT act, you have to take seperate registration. Trade lisence and rental deed may be done in the name of Child and Mother  super shop.

You can take CENTRAL REGISTRATION also to avoid the complexities, if you are not involve with manufacturing.

Sir,

For your kind information unfortunately I didn't get my previous question's answer,

Now my another question is lowest and highest rate of Supplementary duty and custom duty.

rgds. rezaul

Lowest rate of SD is  0%

Highest rate of SD is 500%

Lowest rate of CD is  0%

Highest rate of CD is 25%

Plasma, LCD, TFT, LED and same technology television can be brought one piece per passport under baggage paying specific duty per piece.

18-21 inches       Tk. 7,500/

22-29 inches       Tk. 15,000/

30-36 inches       Tk. 20,000/

37-42 inches       Tk. 30,000/

43-46 inches       Tk. 50,000/

47-52 inches       Tk. 70,000/

53 inches and above Tk. 1,00,000/-

A1. Customs Duty (CD) is the duty at import under Customs Act. It is an ad volerum duty. If the aeable value is Tk. 1000 and CD rate is 5%, the CD = 1000*5% = Tk. 50/-

A2. PSI means Pre-shipment Inpection. Before shipment from overseas to import Bangladesh, you need to do PSI. If your product is under mendatory PSI list, you have to do it. Otherwise, you have to pay panalty in adition to duty.

A3. CRF - Clean Report Finding, CIF - Cost, Insurance and Freight

A4. Customs Bond is a benefit uner which importer get zero duty benefit on import.

On the otherhand, Undertaken is a commitment to do something or not to do something ilegal.

Problem is small but remeady is very difficult. It can be refunded by the authority (code 0015). But it is not the refund item directly. Merit is there only. Under VAT law, there is no other remeady.

You can try under financial rules in CAG office also.

I want to import the following items:

1.Miswak H.S.Code 1211.9092

2. Attar H.S.Code 3303.0020

3.Mehdi(Hina) H.S.Code 9616.2000 and

4.Pan Masala H.S.Code 2106.9090

The goods are of Pakistan origin, shipment from Pakistan to Bangladesh. Hope your goodselves will provide custom duties, vat, A.I.T etc.

Thanks & best regards Farooque Ahmed Karachi - Pakistan.

1.Miswak H.S.Code 1211.9099

Customs Duty (CD) @ 12%, Advance Income Tax (AIT) @ 5%, Advance Trade VAT (ATV) @ 3%.

Total Tax Incidence (TTI) @ 20.43%

2. Attar H.S.Code 3303.0000 Mehdi(Hina)

CD @ 25%, Regulatory Duty (RD) @ 5%, Supplementary Duty (SD) @ 30@, VAT @ 15@, AIT @ 5%, ATV @ 3%.

Total Tax Incidence (TTI) @ 104.83%

3. Mehdi (Hina) H.S.Code 9616.2000

CD @ 25%, Regulatory Duty (RD) @ 5%, VAT @ 15@, AIT @ 5%, ATV @ 3%.

Total Tax Incidence (TTI) @ 58.58%

4.Pan Masala H.S.Code 2106.9090

CD @ 25%, Regulatory Duty (RD) @ 5%, VAT @ 15@, AIT @ 5%, ATV @ 3%.

Total Tax Incidence (TTI) @ 58.58%

Dear Sir

We are a manufacturing Ltd. organization. We are purchasing Raw materials by issuing Purchase order. As per general order No.7/Musak/2011 date 18 Aug 2011 which is published by the NBR where section 4 (ummo) described “Any person/organization who are providing to Source VAT deducting authority (Limited organization), they are procurement provider and eventually source VAT will be deducted.

In these circumstances, if we deduct 4% source VAT (They are providing 15% Musak-11 challan) and it will non rebate able, so cost will enhance 4%, basically we are not clear about this point

We are very much sorry to say, you have not mention any comment on the source VAT chapter in your 7^th edition. Please provide some comments on procurement provider definition for your readers.

Thenks

A.K.M Mezbaul Morshed

A seperate chapter for Deduction at Source is dedicated (Ch 14). Do you kindly see the page no. 726 of 7th edition?

Your answer is given here.

We have got one EPC order from a govt. company(owner) in B'desh funded by World Bank.For all import/purchase of projects materials(other than consumable) shall be borne by  owner. However, from our bill of Taka 100, they will deduct 5.5% as VAT and 5% as Tax and deposit with Govt. So we will get 89.5 taka for a bill of 100 taka. In this case the VAT is charged twice-one from owner and another once from contractor. Further, input credit can not be taken for this 5.5% VAT deduction.The sub-contractor/VAT will also charge VAT on its bills to contractor. Hence, contractor is paying 5.5% VAT plus VAT to sub-contractor.

In this case can the Contractor apply for exemption of charging VAT by sub-contractor/Vendor as the project is WB projects and 5.5% VAT is already deducted and deposited to Govt.?

Thanks and Regards

Kishore

Hello Taxman.

My Company is doing export business in Dhaka, and therefore it should be paying zero VAT for the revenue.

On the other hand, we are paying VAT to the supplier for our expenses and cost.

I wonder if we can submit the mounthly report to NBR so that we can get the VAT refund?

Could you please let me know which part of the law I can refer to?

Also, I wonder if there is any VAT law in English?

Thank you!

Ms Kwok

Yes, you can get all taxes back for export. If your company is 100% export oriented industry, it is better to have a Bond license to get easy 0% for all purchases (local + import). If you have not a Bond license, you have to go to Duty Exepmtion and Drawback Office (DEDO) for duty drawback after completion of export.

You can refer the sections 3(3), 13, 66, 68, and rules made thereunder for getting 0%.

There is an unauthentic english translation of VAT Act, 1991 that I can't refer you. New law (VATA2011 or 2012) is coming in both Bangla & English. 

If the profuct is unpolished, unfinished and in block size, the product will be classified in HS Code 2515.11.00 having effective Total Tax incidence of 90.02% on the value.

If the product is cut-to-size and finished in nature, Total Tax incidence is 151.69% (HS Code 6802.21.00) on the value of the marble.

So now you can calculate the tax amount.

Is VAT chargeable on the amalgamation / merger of two business companies?

Hello,

I am a Bangladeshi citizen living in the united states. I want to send one laptop to one of my poor relatives living in banglades by mail for his educational purpose. That poor relatives does not have any ability to pay customs duty and other taxes to receive that laptop computer. My questions are:

1. What is the customs duty rate and other tax rate will be for the laptop if I send that by mail?

2. Is there any way I can prepay all the duty and taxes while mailing that laptop so that my poor relative does not go through any hassel? If yes, can you please let me know the process of advance paying?

Your help will be appreciated. Look forward to hearing from you soon. Thank you.

Sincerely,

Mohammed Razzaque.

1. You can send a laptop to your relative in Bangladesh. If you send it by any passanger using Baggage benefit, there will be no Customs duty and any other taxes.

2. If you send it by courier, it may take some charges depending on its price, weight etc.

3. Laptop is a duty free item at this moment.

4. There is no provision of advance payment. Better, you can send some money to your relative to pay the relevent expenses.

5. Obeying the legal procedure is not hassel. It is responsibility to all.

1. If you buy jelelry from any online shop inside Bangladesh, Shopper will charge 2% VAT on total value of the juwelry.

2.  If you buy jewelry from any online shop shop outside Bangladesh, Bank will charge 15% VAT on total value of the juwelry during payment of bill. 

3. Creating Account here is the advantages of getting answer for your query. This is not a business organization. We have no authority to reduce tax. Only Government and NBR has legal authority to reduce tax liability.

4. As a citizen of the country, we have to pay JUST TAX, not MORE not LESS. 

Some more information like US$ conversion rate are necessary for specific calculation. Better I suggest you to follow the following process:

• Declare original value during import.
• Preserve Bill of Entry.
• After bringing goods in your warehouse, update Mushak-17 and 18 for import info.
• That means you take credit whatsever you paid to Customs ie VAT and ATV.
• Declare Value to Divisional Officer for your goods with actual price in which you are selling goods to clients.
• Issue Mushak-11 to your client along with supply.
• Update Mushak-17 and 18 for sale info.
• You will pay as VAT to treasury the amount equals to the diffrenec between sales and import VAT. It can be shown as: Net VAT = Sales Value * 15% - Credit (VAT + ATV paid to Customs)
• Submit Monthly Return.

Pl see section 26 of VAT Act, 1991.

About IT ordinance, I cann't help you.