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What Are The Restrictions in Claiming Input VAT Adjustment Against Output VAT? (D-16)

Here are the definitions of the services according to the VAT Act 1991: (i) Procurement provider - Not defined in the VAT Act 1991. Procurement generally refers to the process of obtaining goods or services. (ii) Security service - Security services include guarding or protecting any movable or immovable property, equipment or other assets. It also includes installation, operation or monitoring of security systems like CCTV, alarms etc. (iii) Rent a car service - Rent a car service means the service of renting out or hiring out any motor vehicle including cars, jeeps, vans etc. to customers for their use or journey. It includes renting the vehicle along with a driver or without a driver

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Javed Ahmed
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0% found this document useful (0 votes)
53 views10 pages

What Are The Restrictions in Claiming Input VAT Adjustment Against Output VAT? (D-16)

Here are the definitions of the services according to the VAT Act 1991: (i) Procurement provider - Not defined in the VAT Act 1991. Procurement generally refers to the process of obtaining goods or services. (ii) Security service - Security services include guarding or protecting any movable or immovable property, equipment or other assets. It also includes installation, operation or monitoring of security systems like CCTV, alarms etc. (iii) Rent a car service - Rent a car service means the service of renting out or hiring out any motor vehicle including cars, jeeps, vans etc. to customers for their use or journey. It includes renting the vehicle along with a driver or without a driver

Uploaded by

Javed Ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Value Added Tax and Supplementary Duty Act, 2012

What is Input VAT and input VAT rebate? Is there any time Omit for gelling the
input tax rebate? [J-19] [J-16]

What do you mean by input tax credit? What are the conditions to be fulfilled
in order to claim input tax credit? [J-17]

What are the restrictions in claiming input VAT adjustment against output
VAT? [D-16]

Bangladesh follows a negative list approach in granting input tax credit. It


means, input VAT credit will be given for all purchases/imports except
items excluded from the definition of 'inputs'. Among others, input tax
credit cannot be claimed for VAT paid on acquisitions related to the
exempt or non-taxable supplies and on rental payments. In claiming input
tax credit, the tax payer (claimant) will have to make sure that he is
claiming tax on inputs. If an item is not 'input', tax paid on the item shall
not be considered for input tax credit. Usually invoice is needed to take
Value Added Tax and Supplementary Duty Act, 2012

input tax credit. For VAT paid on import of services, treasury challan in
support of deposit of VAT has to be there.

The input credit system as enshrined in Bangladesh VAT regime is quite


generous. It allows input credit on goods used as inputs, services and fixed
assets. Except the items specified in the negative list (S. 46), tax paid on
other purchases seems eligible for input tax credit. The conditions to be
complied with to get input credit are easy to observe. These conditions are:
(1) Registration under VAT system;

(2) Output VAT to be paid at standard rate (15.0 per cent) -- those who pay
VAT at specific/fixed rate will not be eligible to get input tax credit;

(3) Valid documents (e.g. VAT invoice; Bill of Entry).

List the persons liable to pay VAT as per Value Added Tax and Supplementary
Duty Act, 2012. [J-20]

Persons liable to pay value added tax. Every person specified below shall be liable to pay

(a) in relation to taxable import: the importer;


(b) in relation to any taxable supply in Bangladesh: the supplier;
(c) in relation to any taxable supply of imported service: the recipient of such supply; (d) in
relation to any sale, in the prescribed manner, of any good by an auctioneer on behalf of a
registered person: the auctioneer.

Mention the three types of VAT base. [J-19]

Three Types of VAT Base: There are 3 types of VAT used around the world, each different
in the ways those taxes on investment (capital) expenditures are handled.

The most common is the consumption method, which allows business to immediately
deduct the full value of taxes paid on capital purchases.

The second the net income method, which allows gradual deduction of VAT paid on capital
purchases over a number of years, much like depreciation.

The third type, gross national product method of VAT, provides no allowance for taxes
paid on capital purchases.
Value Added Tax and Supplementary Duty Act, 2012

What are the procedures and time for payment of VAT and Supplementary
Duty? [D-18]

Mention the rule of eligibility for mandatory VAT registration. [D-19]


Value Added Tax and Supplementary Duty Act, 2012

What are the consequences to failure to deduct/collect VAT? [D-17]

What is the time limit for depositing VAT deducted at source? What is the
consequence if Is not deposited within the prescribed time limit? [J-17]
Value Added Tax and Supplementary Duty Act, 2012

Specify the goods and services subject to VAT in Bangladesh as per Section-3
of the VAT Act 1991. [D-17]

Goods and services subject to VAT in Bangladesh as per Section-3 of the VAT Act
1991

(1) Value Added Tax shall be imposed and payable at the rate of 15% on the base values
mentioned in VAT Act on all goods imported into Bangladesh, except the goods listed in the
First Schedule of this Act, and on the supply of all goods not listed in the said Schedule and
on all services rendered in or imported to Bangladesh except those services specified in the
Second Schedule of this Act.
(2) Notwithstanding anything contained in sub-section (I), tax in zero rate shall be
imposed on the following goods or services, namely:
(a) any goods or services exported or deemed to have been exported from Bangladesh;
(b) food and other things supplied to any foreign going transport for consumption
outside Bangladesh in accordance with section 24 of the Customs Act, 1969 (V of 1969)
hereinafter referred to as the Customs Act:
Provided that, this sub-section shall not apply to the following goods, namely:
(i) any goods re-imported or intended to be re-imported into Bangladesh;
(ii) such goods as have been presented for export in accordance with section 131 of the
Customs Act but have not been exported within thirty days of submission of the bill of
export or within the extended time, if any, allowed by the Commissioner in this behalf.
Value Added Tax and Supplementary Duty Act, 2012

What is VAT Current Account? Can a company dispatch any goods from its
factory/ warehouse keeping credit balance in the current account? [J-19,J-16]

How do you maintain VAT current register (VAT-18) as per VAT Act and Rule-
22 of VAT Rules 1991? [D-16]

VAT Rules 1991


Current Account Book. records of transactions, output tax payable, deposit into treasury,
amount of creditable input tax and related information shall have to be recorded in this book as
-
time to time so that with the deposit and input tax credit together output tax payable can be paid
at any time.
The Commissioner on the application of the registered person can permit to maintain
computerized books of accounts regardless of the provisions in Sub-Rule (1) on
condition of preservation of computerized copy of accounts at the place of production,
manufacture or trading or service rendering or any other condition specified by
Commissioner.
If a contractual manufacturer produces any Value Added Tax imposable goods in the
same premises, he will maintain the accounts separately as per the provisions of law for
the goods produced on contractual basis and own goods produced.
(Any registered person shall maintain the accounts of production or manufacture of goods or
raw materials, services, machinery or parts thereof used in the supply of services or any bill paid
by him or any treasury deposit or accounts related to production or manufacture of goods in the
manner so that it can be easily audited.
Value Added Tax and Supplementary Duty Act, 2012

What are the books and records to be kept under the VAT Act 1991? [J-17]
Who are required to maintain records as per the VAT Act and VAT Rules? What
Books and records are required to be maintained by the following person (company)
U/S (under section) 31 and rule 22? [D-17]
(i) Manufacturer or producer
(ii) Turnover tax payer
(iii) Person responsible for deduction of VAT at source.
Value Added Tax and Supplementary Duty Act, 2012
Value Added Tax and Supplementary Duty Act, 2012

June 2020 Q.No.02


Value Added Tax and Supplementary Duty Act, 2012

Define the following services as per VAT Act 1991. [D-16]


(i) Procurement provider
(ii) Security service
(iii) Rent a car service

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