Section – 4: Value Added Tax and Supplementary Duty Act, 2012

Section No. – 4: Persons required to be registered for VAT

(1) Irrespective of any central, or branch unit, each of the following persons shall, from the first day of a month, be required to be registered for VAT, namely—

     (a) a person whose turnover exceeds the registration threshold within a 12 (twelve)- month-period closing at the end of the month preceding that month; or

     (b) a person whose estimated turnover exceeds the registration threshold within the succeeding 12 (twelve)- month-period beginning at the start of the start of the preceding month.

(2) Notwithstanding anything contained in sub-section (1), every person carrying on the following economic activities of—
Has to be registered for VAT, if he—
     (a) manufactures any good subject to supplementary duty in Bangladesh; or

     (b) supplies any service subject to supplementary in Bangladesh;

Source: www.nbr.gov.bd

Section – 2: Value Added Tax and Supplementary Duty Act, 2012

Section No. – 2: Definitions.—

In this Act, unless there is anything repugnant in the subject or context,—
(1) “non-resident” means a person who is not a resident;
(2) “offence” means any offence specified in sections 111, 112 and 113;
(3) “exempted supply” means any supply specified in section 26;
(4) “exempted import” means any import specified in section 26;
(5) “money” means any existing legal tender of Bangladesh or of any other country, and also includes the following instruments, namely—
(a) negotiable instrument;
(b) bill of exchange, promissory note, bank draft, postal order, money order or any other similar instrument;
(c) credit card or debit card; or
(d) any supply made through account credit or debit;
(6) “economic activity” means any activity carried on regularly or
continuously for making supply of any good, services or immovable
property, and
(a) also includes the following activities, namely-
(i) any business, profession, vocation, means of earning
livelihood, manufacture or undertaking of any kind, whether or
not for profit;
(ii) Supply of any good, service or property made under any lease,
licence, or a similar arrangement,
(iii) any one-off initiative in the nature of a commercial activity or
enterprise; or
(iv) any activity carried out at the beginning or at the end of such
an activity; but
(b) shall not include the following activities, namely-
(i) any service rendered by an employee to his employer;
(ii) any service rendered by any director of a company:
provided that the services rendered by a director, who holds the
office of the directorship for the purposes of the business of the
company, shall be regarded as an economic activity;
(iii) any recreational pursuit or hobby carried on a non-commercial
basis; or
(iv) any prescribed activity carried on by the Government without
any commercial motive;
(7) “partnership” means the partnership as defined in section 4 of the Partnership Act, 1932 (Act No. IX of 1932);
(8) “advance tax” means any tax payable in advance under section 31(2) on a taxable import;
(9) “order” means any order, general or special, issued by the Board or by any authorised VAT official;
(10) “progressive or periodic supply” means-
(a) any supply for which the consideration is paid progressively or periodically under the terms of an agreement;
(b) any supply made under the terms of any lease (including finance lease), hire of licence; or
(c) any supply made directly for any construction or engineering activity or for restructuring or extension of any building;
(11) “ancillary transport services” means any stevedoring services, lashing and securing services, cargo inspection services, services relating to preparation and processing of customs documentation, container handling services, and services relating to the storage and safe-keeping of transported goods or goods to be transported and any other similar service;
(12) “international transport” means, except the ancillary transport services, any of the flowing services of transportation of any passenger or good by road, water or air from one place to another, namely-
(a) from a place outside Bangladesh to another place outside Bangladesh;
(b) from a place outside Bangladesh to a place within Bangladesh; or
(c) from a place within Bangladesh to a place outside Bangladesh;
(13) “international assistance and loan agreement” means an agreement between the Government of Bangladesh and a foreign Government, or an international organisation for rendering assistance to Bangladesh in the areas of finance, technology or administration;
(14) “appellate tribunal” means the Customs, Excise, and Value Added Tax Appellate Tribunal constituted under section 196 of the Customs Act;
(15) “resident” means an individual who-
(a) normally lives in Bangladesh; or
(b) stays in Bangladesh for more than 182 (one hundred and eighty-two) days in a current calendar year; or
(c) stays in Bangladesh for more than 90 (ninety) days in a calendar year and stayed in Bangladesh for more than 365 (three hundred and sixty-five) days during the four immediately preceding calendar
years; and also includes the following entity, namely—
(i) a company, if it is incorporated under the prevalent laws of Bangladesh or its centre of control and management is in
Bangladesh;
(ii) a Trust , if a Trustee thereof is a resident of Bangladesh or the centre of control and management of the Trust is in Bangladesh;
(iii) an association of persons other than a Trust , if it is formed in Bangladesh or its centre of control and management is in Bangladesh;
(iv) all government entities; or
(v) a property development joint venture;
(16) “import” means bringing in any good from outside to within the geographical boundary of Bangladesh;
(17) “imported service” means supply of any service made from outside Bangladesh to a person registered or required to be registered;
(18) “electronic service” means the following services, when provided or delivered on or through a telecommunications network, a local or global information network, or similar means, namely—
(a) websites, web-hosting, or remote maintenance of programmes and equipment;
(b) software and the updating thereof delivered remotely;
(c) images, texts, and information delivered;
(d) access to databases;
(e) self-education packages;
(f) music, films, and games; and
(g) political, cultural, artistic, sporting, scientific and entertainment broadcasts and telecasts and events, including telecasts;
(19) “input tax” means the value added tax imposed on any taxable supply of any good, services or immovable property including the value added tax payable by any person on the taxable supply of imported goods or services;
(20) “output tax” means the value added tax payable by any registered person for the following activities, namely—
(a) supply of any taxable good, service or property by such person; or
(b) import of any taxable service by such person;
(21) “withholding entity” means-
(a) a government entity;
(b) a non-government organisation approved by the NGO Affairs Bureau or the Directorate-General of Social Welfare;
(c) a bank, insurance company or a similar financial institution;
(d) a post-secondary educational institution;
(e) a public limited company; or
(f) an establishment registered under a large taxpayers’ unit (VAT);
(22) “withholding certificate” means a certificate in respect of an amount of tax withheld at source;
(23) “Commissioner” means, when the word is used singly, an officer appointed to the position of Commissioner under section 78 of this Act;
(24) “tax” means VAT, turnover tax , supplementary duty, and shall, in relation to realisation of arrears, also include any interest, monetary penalty or fine;
(25) “tax invoice” means a document issued by any supplier under section 51;
(26) “taxpayer” means a person who pays tax under this Act, and it also includes a withholding entity;
(27) “tax assessment” means an assessment of net payable tax by any taxpayer under chapter fifteen;
(28) “tax determination” means a determination of net payable tax by any Commissioner under chapter eleven;
(29) “tax fraction” means the amount of money arrived at in accordance with the following formula: R where R is the VAT rate specified in section 15(3); 100 + R
(30) “tax period” means-
(a) in relation to VAT and supplementary duty, one month of the Christian Calendar; or
(b) in relation to turnover tax, every three- month- period ending on 31 March, 30 June, 30 September or 31 December;
(31) “taxable import” means any import, other than an exempt import;
(32) “taxable supply” means a supply other than an exempted supply, which is
made-
(a) in Bangladesh–
(i) by any person registered or required to be registered; and
(ii) through the process of economic activities;
(33) “tax rate” means, depending on the context,—
(a) VAT rate specified in section 15(3);
(b) supplementary duty rate specified in section 55(4); or
(c) turnover tax rate specified in section 63(1);
(34) “tax benefit” means any one of the following benefits, namely—
(a) a reduction in the output tax liability;
(b) a reduction in the VAT liability on an import of goods;
(c) an increase in an excess money carried forward or a reduction in the payable tax amount;
(d) an increase in the entitlement to a decreasing adjustment;
(e) a decrease in an increasing adjustment;
(f) a refund of tax;
(g) deferment of an output tax or acceleration of an input tax credit entitlement;
(h) a delay in accounting for output tax or an increasing adjustment or an acceleration of entitlement to an input tax credit or other decreasing adjustments;
(i) conversion of an original and actual taxable supply or import into a non-taxable supply or import;
(j) creating a right to an input tax credit in relation to an original and actual import or acquisition which would not otherwise be allowed; or
(k) showing a less-than-actual turnover by a taxpayer;
(35) “proceeding” means any proceeding or process initiated by a Commissioner under this Act, but does not include any judicial proceeding in respect of any offence;
(36) “lay-by agreement” means an agreement in respect of a sale or purchase,
under which—
(a) after the payment of the money for first installment, the price is paid by at least one more installment;
(b) possession of the good is conferred after payment of the money of the last installment is made; and
(c) ownership of the good is transferred on conferment of possession;
(37) “central unit” means a unit or place where all the accounts and records of an economic activity are centrally conducted and maintained;
(38) “company” means an entity incorporated as a company under any law;
(39) “credit note” means a document issued by a taxpayer in support of a decreasing adjustment;
(40) “invoice” means a document showing the liability of the payment of any consideration;
(41) ” penalty” means a monetary penalty imposed by a Commissioner under section 85, but does not include a fine imposed by a court of Law on the trial of an offence;
(42) “turnover” means, in relation to a person, all the money received or receivable by such person within a prescribed time or tax period against the supply of taxable goods or the rendering of taxable services manufactured, imported or purchased by means of his economic activities;
(43) “turnover tax” means the tax imposed under section 63;
(44) “debit note” means a document issued by a taxpayer in support of an increasing adjustment;
(45) “schedule” means any schedule to this Act;
(46) “enlisted” means an enlistment made for turnover tax under section 10(2);
(47) “person required to be enlisted” means any person required to be enlisted for turnover tax under section 10(1);
(48) “enlistment threshold” means the limit of Taka 24 lakh as turnover of an economic activity of any person in a 12 (twelve)- month- period, but does not include the the following, namely-
(a) the value of an exempted supply;
(b) the value of sale of a capital asset;
(c) the value of a sale of an organisation of economic activities or any portion thereof; or
(d) the value of a supply made as a consequence of permanently closing down an economic activity;
(49) “document” would mean to include the following things, namely-
(a) anything expressed or stated with the help of letters, numbers, symbols or signs on paper or any other like material; and
(b) any electronic data, computer programme, computer tape, computer disk, or any other similar device that can hold data;
(50) “return” means a return filed by a taxpayer in a tax period for tax assessment and tax determination;
(51) “Code of Civil Procedure” means the Code of Civil Procedure, 1908 (Act No. V of 1908);
(52) “fixed place” means any of the following places at or through which economic activities inside or outside Bangladesh are carried on, namely—
(a) a place of management;
(b) a branch, an office, a factory, or a workshop;
(c) a mine, a gas well, a quarry for extraction of stones or any other similar mineral resource; or
(d) a location of any construction or installation project;
(53) “prescribed” means prescribed by any rule or order issued by the Board;
(54) “registration” means the VAT registration under section 6;
(55) “person required to be registered” means any person required to be registered for VAT under section 4;
(56) “registered person” means any person registered for VAT under section 6;
(57) “registration threshold” means the limit of Taka 80 (eighty) lakh as turnover of an economic activity of any person in a 12 (twelve)- monthperiod, but does not include the following, namely-
(a) the value of an exempted supply;
(b) the value of sale of a capital asset;
(c) the value of a sale of an organisation of economic activities or any portion thereof;
(d) the value of a supply made as a consequence of permanently closing down an economic activity;
(58) “fair market price” means—
(a) the consideration for a supply arrived at on the basis of a normal relation between a buyer and a seller, who are not associated with each other;
(b) if it is not possible to arrive at a fair market price as prescribed in clause (a) above, it would then be the consideration of a similar supply made previously under similar circumstances;
(c) if it is not possible to arrive at a fair market price by the above means, it may be determined by the Board on the basis of an impersonal average of considerations arrived at in the course of normal business relations among buyers and sellers, who are not associated with one another;
(59) “consideration” means the money paid or payable, whether directly or indirectly, in consequence of, or as an inducement to, a supply, or the fair market price of a thing paid or payable in lieu of cash,— and also includes the money realised or realisable on the following accounts, namely—
(a) any tax imposed under this or any other Act that is—
(i) payable by the supplier on, or by reason of, a supply; and
(ii) included in, or added to, the price charged to the recipient ;
(b) any money realised as service charge; or
(c) any money payable in relation to a loan agreement under finance lease or hire purchase and included in the consideration for supply of goods under hire purchase or finance lease; but does not include any discount in price given at the time of a supply;
(60) “goods” means, other than share or stock or security or money, all kinds of tangible movable property;
(61) “Supply of goods” means—
(a) the transfer of the right, as an owner, to sell, exchange, or otherwise dispose of, a good, including a sale under hire purchase agreement; or
(b) giving the right to use the good on lease, rent or otherwise, and it also includes the supply of goods under finance lease;
(62) “deemed export” would mean to include one or more of the following
supplies, namely—
(a) supply of any ingredient of a good or service in a prescribed manner against foreign exchange and destined for consumption outside Bangladesh;
(b) supply of any good or service within the territory of Bangladesh against foreign exchange through an international tender; or
(c) supply of any good or service within the territory of Bangladesh against foreign exchange under cover of a local letter of credit;
(63) “representative” means—
(a) for a mentally or physically challenged individual, a guardian or a manager appointed by him;
(b) for a company other than a company in liquidation, the chief executive officer of the company;
(c) for a partnership, a partner thereof;
(d) for a Trust, any Trustee of the Trust or an executor or administrator of such Trust;
(e) for an association of persons, its chairman, secretary or the treasurer;
(f) for a government entity, the chief executive officer of the entity;
(g) for a foreign government, an officer appointed by such foreign government;
(h) for a non-resident, any VAT Agent appointed by him; or
(i) any other prescribed representative;
(64) “net payable tax ” means the actual payable VAT, supplementary duty or turnover tax in a particular tax period after assessment of the total output tax under section 45 and making adjustment therewith of increasing adjustments, decreasing adjustments and rebate of input tax in that tax period;
(65) “manufacturing” means—
(a) transforming or reshaping of any substance by processing individually or in combination with any other substance, material or components of production for changing, transforming or reshaping it into a different specific substance or good so that it becomes useable differently or specifically;
(b) any incidental or related processes required to complete the production of goods;
(c) any printing, publication, lithography or engraving processes;
(d) any assembling, mixing, cutting, liquefaction, bottling, packaging or repackaging; or
(e) all processes adopted for production or manufacture of goods, including intermediary or an incomplete process;
(66) “finance lease” means any lease other than a hire purchase that is treated as finance lease under International Financial Reporting Standards;
(67) “Code of Criminal Procedure” means the Code of Criminal Procedure, 1898 (Act No. V of 1898);
(68) “arrear tax” means the arrear tax specified in section 95;
(69) “rule” means any rule made by the Board;
(70) “Bill of Entry” means the bill of entry as defined in section 2(c) of the Customs Act;
(71) “increasing adjustment” means any of the following adjustments, namely-
(a) an increasing adjustment in respect of withholding tax;
(b) an increasing adjustment required for an annual re-calculation;
(c) an increasing adjustment if a payment is not made through banking channels;
(d) an increasing adjustment for goods put to a private use;
(e) an increasing adjustment on being registered;
(f) an increasing adjustment on cancellation of registration;
(g) an increasing adjustment for a change in the VAT rate;
(h) an increasing adjustment for the payment of any interest, monetary penalty, fine, fee, etc; or
(i) any other prescribed increasing adjustment;
(72) “large taxpayers’ unit” means any unit formed under section 78(3);
(73) “Board” means the National Board of Revenue established by the National Board of Revenue Order, 1972 (P.O. No. 76 of 1972);
(74) “person” means any natural person , and also includes the following entities, namely—
(a) a company;
(b) an association of persons;
(c) a government entity;
(d) a foreign government or a department designated, or any official appointed, by it;
(e) an inter-state or international organisation; or
(f) a joint venture for property development or any other similar initiative;
(75) “association of persons” means any partnership, Trust or any similar association of persons, but does not include any company or unincorporated joint venture;
(76) “business identification number” means a unique business identification number mentioned in the VAT registration certificate or turnover tax certificate issued to a registered or enlisted person;
(77) “services directly related to land” mean—
(a) services rendered directly on land;
(b) services of experts and estate agents rendered to specific pieces or areas of land; and
(c) services relating to construction work undertaken, or to be undertaken, on specific piece or pieces of land;
(78) “value” means—
(a) the value of import specified in section 28 ; or
(b) the value of supply specified in section 32 ;
(79) “value added tax” or “VAT” means the value added tax imposed under section 15;
(80) “Value Added Tax Authority” means the authority specified in section 78;
(81) “Value Added Tax Officer” or “VAT officer” means any officer specified in section 78(1);
(82) “export” means a supply of any good from inside to outside the geographical limits of Bangladesh, and also includes a deemed export;
(83) “branch unit” means a unit of an economic activity where accounts and records of such branch are maintained and kept separately and independently;
(84) “The Customs Act” means The Customs Act, 1969 (Act No. IV of 1969) or any rule made or order issued there under;
(85) “Commissioner of Customs” or “Customs Officer” means an officer appointed under the Customs Act;
(86) “zero-rated supply” means any supply specified as zero-rated in section 21;
(87) “adjustment event” means any of the following events, namely—
(a) cancellation of any supply;
(b) alteration of the consideration for any supply;
(c) return of any supplied good, jn part or in full, to the supplier;
(d) conversion of a supply into a zero-rated or an exempted one as a result of an alteration in the nature of such supply; or
(e) any other prescribed event;
(88) “joint venture for property development” means an agreement under which a land owner commits himself to a builder under certain terms and conditions for constructing a building or buildings on his land;
(89) “supplementary duty” means the supplementary duty imposed under section 55;
(90) “goods subject to supplementary duty” means any good specified in the second schedule;
(91) “services subject to supplementary duty” means any service specified in the second schedule;
(92) “integrated tax invoice and withholding certificate” means a document specified in section 53;
(93) “government entity” means—
(a) a government or any of its ministries, divisions, or attached departments;
(b) a semi-government entity or an autonomous body;
(c) a state-owned enterprise; or
(d) a local authority, council, or a similar organisation;
(94) “supply” means any supply, and it also includes the following namely—
(a) a supply of goods;
(b) a supply of immoveable property;
(c) a supply of services; or
(d) a combination of the supplies of the above clauses (a) (b) and (c);
(95) “certificate” means any certificate issued by the Commissioner under this Act;
(96)) “time of supply” means—
(a) in relation to supply of goods, the time when the possession of the goods are conferred or they are removed;
(b) in relation to supply of services, the time when the services are rendered, generated, transferred or assigned; or
(c) in relation to supply of any immovable property, the time when the property is delivered or created or transferred or assigned;
(97) “associate” means such a relation between two persons as would make one act or reasonably expected to act in accordance with the intention of the other, or make both act or reasonably expected to act in accordance with the intention of a third person, and it also includes the following persons, namely—
(a) a relative of any of those persons;
(b) a partner of a partnership;
(c) a shareholder of a company;
(d) a Trust and a beneficiary of such Trust; or
(e) a joint venture for property development and the landowner as a partner of that joint venture, builder, or other related person; but does not include the following related persons, namely—
(a) persons with employment relations; or
(b) representative, VAT Agent, distributor, licensee or persons with similar relationship;
(98) “second-hand good” means such a good as has been used before, but does not include any precious metals or any good made out of such precious metal (such as: gold, silver, platinum or any other similar metal), and diamond, ruby , emerald or sapphire;
(99) “service” means any service but does not include any good, immovable property and money;
(100) “supply of service” means such a supply as is not a supply of good, money, or immoveable property, which, without prejudice to the generality, shall include the following, namely–
(a) a grant, assignment, termination, or conferment of a right;
(b) making a facility, an opportunity, or an advantage available;
(c) an agreement to perform an act, to refrain from performing an act or accepting a situation or to tolerate an act or a situation; and
(d) the issuance, transfer or conferment of a licence, permit, certificate, concession, authorisation, or a similar right;
(101) “immovable property” means the subject-matter of a supply of any immovable property whether the subject-matter is a property or a combination of the rights attached to it, and it shall also include land or any building situatd on that land or any structure constructed on or attached to it;
(102) “supply of immovable property” means to include the following supplies
(a) an interest in, or right over, land;
(b) a personal right consisting of an invitation to confer a right or interest on land;
(c) issuance of a licence to occupy land including supply of residential accommodation or a contractual right exercisable over, or in relation to, land;,
(d) a right to acquire anything mentioned in clauses (a) (b) and (c) or the option to exercise that right in future;
(103) “decreasing adjustment” means any of the following adjustments, namely—
(a) a decreasing adjustment for the money paid as advance tax;
(b) a decreasing adjustment allowed to a supplier of telecommunications goods or services;
(c) a decreasing adjustment in respect of withholding taxes;
(d) a decreasing adjustment applicable as a result of an annual recalculation;
(e) a decreasing adjustment on being registered;
(f) a decreasing adjustment in relation to second-hand goods purchased for re-sale;
(g) a decreasing adjustment in relation to an indemnity payment under a policy of insurance;
(h) a decreasing adjustment in relation to a monetary prize paid for a lottery, lucky draw, raffle, or similar undertaking;
(i) a decreasing adjustment where there is a decrease in the VAT rate;
(j) a decreasing adjustment allowed to refund of supplementary duty;
(k) a decreasing adjustment claimed for a negative net amount carried forward from a previous tax period;
(l) a decreasing adjustment allowed for VAT overpaid in a previous tax period; or
(m) any other prescribed decreasing adjustment.

Source: www.nbr.gov.bd

Section – 1: Value Added Tax and Supplementary Duty Act, 2012

Section No. – 1: Short Title and Commencement.—

(1) This Act may be called the Value Added Tax and Supplementary Duty Act, 2012.

(2) The Chapter Two, Chapter Twelve and Chapter Fifteen, and sections 128, 132, 134, and 135 of this Act shall come into force at once.

(3) Save and except the Chapters and Sections mentioned in sub-section (2), the other Chapters and Sections of this Act shall come into force on such date as the Government may, by notification in the official Gazette, appoint.

Source: www.nbr.gov.bd