Introduction:

To the majority of the people in our society when you say to them food and beverage they think fast food and restaurants. Rarely do they take into consideration the tons of other food and beverage outlets that encompass this industry and make it one of the largest ever growing industries in the world. Food is a necessary part of life and will always be needed. Those are some reasons why this industry has an above average future outlook. The food and beverage industry includes a vast amount of venues. It is a very diverse industry consisting of commercial operations and non-commercial operations. Commercial operations can be classified as either part of the restricted market or the general market. Examples of the restricted market would be some institutional employee catering, or private clubs. The general market includes but is not limited to hotels, fast foods, vending machines, pubs, amongst others. Non-commercial operations are establishments where meals and snacks are prepared / served as an adjunct, supportive service to the primary purpose of the establishment. For example: hospitals, schools, and prisons. These may also fall under the subsidized category of either private or public ownership which may include employee catering or institutional catering. These foodservice operations financial goal does not involve generating profit from the sales of food and beverage product, and may also be called institutional foodservice. Some of the different types of food and beverages establishments are: bars & pubs, cafes, canteens, coffee shops, fast food outlets, food courts, hawker stalls, restaurants, snack bars, cafs, coffee houses & snack bars, coffee shops, eating houses & food courts, fast food restaurants, food caterers, food stalls, hawker stalls, restaurants. All of these fall under different categories.

Origin of Tax:

Late 13 bc., from Old French. Taxers impose a tax" (13bc.), from L. taxare "evaluate, estimate, assess, handle," also "censure, charge," probably a frequentative form of tangere "to touch" (see tangent). Sense of "burden, put a strain on" first recorded 1672; that of "censure, reprove the first known system of taxation was in Ancient Egypt around 3000 BC - 2800 BC in the first dynasty of the Old Kingdom. The earliest and most widespread form of taxation was the corve and tithe. The corve was forced labor provided to the state by peasants too poor to pay other forms of taxation (labor in ancient Egyptian is a synonym for taxes). Records from the time

Principles of Taxation 1

document that the pharaoh would conduct a biennial tour of the kingdom, collecting tithes from the people. Other records are granary receipts on limestone flakes and papyrus Middle English (also in the sense 'estimate or determine the amount of a penalty or damages', surviving in from Old French taxer, from Latin taxare 'to censure, charge, compute', perhaps from Greek tassein 'fix.

Definition of Tax:
Government levy on persons, groups, or businesses. Taxes are a general obligation of taxpayers and are not paid in exchange for any specific benefit. They have existed since ancient timesproperty taxes and sales taxes were known in ancient Rome but tariffs was favored over internal taxes as a source of revenue. In modern economies, there has been a trend away from tariffs in favor of internal taxes, which provide the majority of revenues. Taxes have three functions: to cover government spending, to promote stable economic growth, and to lessen inequalities in the distribution of income and wealth. They have also been used for nonfiscal reasons, such as to encourage or discourage certain activities. Taxes may be classified as direct or indirect. Direct taxes are those that the taxpayer cannot shift onto someone else; they are mainly taxes on persons and are based on an individual's ability to pay as measured by income or net wealth. Direct taxes include income taxes, taxes on net worth, death duties and gift taxes. Indirect taxes are those that can be shifted in whole or in part to someone other than the person legally responsible for payment. These include excise taxes, sales taxes, and value-added taxes. Taxes may also be classified according to the effect they have on the distribution of wealth. A proportional tax is one that imposes the same relative burden on all taxpayers, unlike progressive taxes and regressive taxes.

Overview of Tax:
The legal definition and the economic definition of taxes differ in that economists do not consider many transfers to governments to be taxes. For example, some transfers to the public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. Governments also obtain resources by creating money (printing bills and minting coins), through voluntary gifts (contributions to public universities and museums), by imposing penalties (traffic fines), by borrowing, and by confiscating wealth. From the view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the Public sector levied on a basis of predetermined criteria and without reference to specific benefit received.

Principles of Taxation 2

Pieter Brueghel the Younger, The tax collector, 1640 In modern taxation systems, taxes are levied in money; but, in-kind and corve taxation is characteristic of traditional or pre-capitalist states and their functional equivalents. The method of taxation and the government expenditure of taxes raised is often highly debated in politics and economics.

About Food and Beverage:

F&B is a common abbreviation in the Commonwealth countries. F&B is typically the widely accepted abbreviation for "Food and Beverage", which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. The largest section of F&B employees are in restaurants and bars, including hotels, resorts, and casinos.

Nature of food and beverage in Bangladesh:

After independence the food habit of Bangladeshi people has been changed a lot. Besides our traditional food consumer of Bangladesh like to take western food also after 1980s. As a result of global marketing this was not too hard for the consumers. Different foreign food companies were established in Bangladesh. Beverage industry is one of them. But more interestingly we dont know beverage is also our cultural food because beverage doesnt mean only carbonated drinks. Yoghurt, soup and litchi are a l s o b e v e r a g e o f o u r o w n t r a d i t i o n w h i c h c o n s u m e d f o r t h e l a s t 1 0 0 y e a r s i n Bangladesh. But carbonated beverage is new in Bangladesh and today our research is on carbonated beverage market in Bangladesh and consumer reaction to it. Carbonated beverage entered into our market in the later part of 1980. At that time there were only few companies in Bangladesh. But by the change of time and western culture influences its become very popular in Bangladesh. By year 2000 more than 12 Beverage Company operating business in Bangladesh and most of them are foreign companies. (Bangladesh Beverage: 2006)T h i s p a p e r i s d i v i d e d i n t o s i x s e c t i o n s . T h e f i r s t s e c t i o n c o n t a i n s i n t r o d u c t i o n , objectives and methodology. Section two is designed to focus on the literature review. The third section is dedicated to the conceptual analysis of beverage. In the fourth section, an overview of the beverage market in Bangladesh explained. Principles of Taxation 3

Food and Beverage directly do:

Most hotels and large restaurant chains have a food and beverage director. This is an individual who manages the entire food and beverage operation of a company. He is responsible for coordinating the management of large banquets, weddings, conferences, and restaurant activities. This director is responsible for the oversight of employees, inventory, and budgets of the food and beverage department. The education for a food and beverage director is typically either a hotel restaurant management program or a culinary degree. The director should understand basic hotel management and restaurant management. This type of curriculum is available at many culinary colleges throughout the world. Many directors work through their way up through various disciplines of restaurant management operations. This typically includes cooking, serving, and shift management training. The director is responsible for the entire restaurant and banquet facility team. His staff size can range from 50 to 100 employees, depending on the size of the company. Most food and beverage director positions require the management of the alcohol budget. This requires strict monitoring of bartenders, the bar area, and pouring techniques. The director is required to perform daily inventory of liquor sales and usage to ensure adequate profit margins are maintained in the bar area

Food & Beverage Department:

It requires a big effort to keep those three-million visitors from going hungry. Joining the Food & Beverage Department means being part of a team that creates and serves food in one of many food outlets around the park. We hire more than

1,000 people each season to work in our formal dining rooms, fast food outlets, delis and cafeterias. The Food & Beverage department is the largest department on board comprising of various areas working together to cater to our guests food and beverage needs. From mouth-watering meals to deliciously refreshing cocktails, the food and beverage department works around the clock to ensure our guests receive world class service, award winning cuisine and memorable experiences at all our bars, Principles of Taxation 4

restaurants and lounges. Entry level positions within this department include waiters, cooks, bar servers, hotel stewards and galley stewards, however there are numerous management and supervisory positions as well as opportunities for career advancement.

About Bangladesh Market:

The food processing industry is a 4.5 bill USD industry in Bangladesh Processed food represents one of the major potential sectors in terms of its contribution to value addition and employment. The sector accounts for over 22% of all manufacturing production and employs about 20% of the labor force. All food processing enterprises account for 5% of GDP (around 4.48 bill USD). There are nearly 700 processed food manufacturing enterprises in the country. These include processing of bakery confectionary, fruits and vegetables, cereals, dairy, carbonated and non carbonated fruits juices, drinks, others beverages and various other food products. At the moment Bangladesh exports around 90 kinds of agro-processed food products to over 70 countries throughout the world. However, value-wise 81% of the products are exported to ten major importing countries including Italy and UK in Europe, USA and to a smaller extent Canada in the Americas and a number of Middle East Countries with KSA, UAE and Kuwait taking the lead.

Food & Beverage Management

The management positions within this department require self motivated candidates with strong leadership skills, a positive attitude, and a keen eye for detail. They must

Principles of Taxation 5

have a pleasant personality, be fluent in conversational & written English and be able to positively motivate and lead our Food & Beverage team. Must be extremely quality conscious and be familiar with accounting systems and practices, food costs and beverage cost structures and inventory management. Computer skills (MS Office) are another strong requirement.

Food and Beverages Rules and Regulations:

Any food or beverage which is prepared to the order of the purchaser or which is cooked and/or maintained at or near the cooking temperature or kept at or above room temperature to make it or for it to remain palatable and suitable prior to sale, shall be considered to be made available for immediate consumption and subject to the Prepared Food and Beverage Tax.

Sales from vending machines are specifically exempt from the Prepared Food and Beverage Tax Sales of prepared food and beverages are subject to the Tax unless prepared by someone other that the retailer for immediate consumption and merely placed on display for sale purposes. Examples include prewrapped sandwiches, packaged crackers, prepacked ice cream, etc.

Sales of prepared foods and beverages available for immediate consumption that are sold on a "take-out", "to-go" or delivery basis are subject to the Prepared Food and Beverage Tax. Any alcoholic or nonalcoholic beverage sold by the drink or as part of a meal is subject to this tax. Exceptions would be soft drinks and alcoholic beverages (i) purchased in unopened package form (i.e., six pack, cans, bottles, cases) and (ii) not to be consumed on the premises of the retailer or where otherwise served by a caterer. Examples of taxable beverages include a bottled drink sold by a caterer or bar for opening and consumption by a customer on the retailers premises or whenever served by a caterer and orange juice and milk served at a fast food establishment; nontaxable beverages include can drinks sold by a convenience store and a bottle of wine sold by a retailer for "take-out" by the consumer.

Prepared Food and Beverage sales made to the general public or employees that are paid for, directly or indirectly, by cash, charge card, payroll deduction, meal ticket, voucher or other means are subject to this tax and must be collected by the retailer or employer.

Sales derived from Salad Bars (i.e. cut-up fruits and vegetables) sold in various sized servings, usually by the pound or plates are subject to this tax. Salad items such as potato salad, cole slaw, macaroni, bean and congealed salads including chicken salad, etc., and sliced or unsliced meats that the retailer has

Principles of Taxation 6

not altered by heating or combining two or more foods (i.e. retailer is merely repackaging), which are sold in carry-out containers, are not subject to this tax; any of the forgoing sold as part of a meal, deli tray or otherwise as part of a steamed table products is subject to this tax. Whole pies and cakes altered on-site in any way (icing added, decorated, baked, etc.) are subject to this tax.

In addition to the foregoing, the following rules and regulations apply to the category or retailers set forth below:
Independent Bakeries: Food and beverages prepared by an independent bakery are subject to this tax if baked, decorated or altered in any way on the retailer's site. Artisan Bakeries (effective January 1, 2009): Bakery items (bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danishes, cakes, tortes, pies, tarts, muffins, bars, cookies and tortillas) sold without eating utensils by an artisan bakery are exempt from the Prepared Food and Beverage Tax. An "artisan bakery" is a bakery that derives over 80% of its gross receipts from bakery items and whose annual gross receipts, combined with the gross receipts of all related persons as defined in NCGS 105-163.010, do not exceed $1,800,000. Caterers and Food Delivery Services: Any food or beverages prepared by a caterer or food delivery service (regardless of the primary place of business or place of food preparation) and served within Wake County is subject to the Prepared Food and Beverage Tax. All charges are subject to this tax except gratuities of 20% or less that are separately stated on the invoice and distributed to service personnel. Any food or beverage prepared by caterers or food delivery services located within Wake County to be served outside the County will not be subject to the Prepared Food and Beverage Tax. Convenience Stores: Examples of food and beverages subject to this tax include hot dogs (whether placed on rotisserie by customer or retailer), brewed coffee, fountain drinks and dip ice cream, etc. Prepackaged sandwiches prepared by someone other than the retailer are not subject to this tax. Temporary Vendors:

Principles of Taxation 7

All temporary food and beverage vendors that operate as such, must make a fifty dollar ($50) cash prepayment at least one (1) week in advance prior to commencement of business to the Wake County Revenue Department and any additional tax monies due must be paid with the Prepared Food and Beverage Tax Return. A refund will be made if determination is made by the Revenue Department that the tax amount due (plus penalties, if any) is less than the original prepayment amount. Grocers, Independent Delicatessens and Other Diversified Retail Establishments Sales of prepared food and beverages in independent delicatessens and in the delicatessen or similar department of a grocer or other diversified retail establishment that are subject to taxation under the Ordinance shall be limited to the sale of any Prepared Food or Beverage that is (i) heated when sold, (ii) sold as a single serving, or (iii) sold as a steamed table product, (iv) altered in any way (except sliced or repackaged) or, (v) any two or more foods and or ingredients combined to make a single item sold as a single serving or sold as a whole packaged item or sold in bulk. For purposes of the Regulation, a "steamed table product" shall mean any one or more foods and beverages sold collectively as a meal available for immediate consumption, including without limitation both heated and cooled foods and beverages.

Deli trays (meat, cheese, fruit, etc.) are subject to the Prepared Food and Beverage Tax. Sales derived from Salad Bars (i.e. cut up fruits and vegetables) sold in various sized servings, usually by the pound or plates are subject to this tax.

Beverages

Akher gurer Sorbot sugarcane liquid jaggery's juice Akher Rosh Sugarcane juice Ampanna unripe boiled mango juice Borhani inspired by Awadhi cuisine; salted curd with mix spices juice Ghol whisked salted milk Khejurer Rosh local dates juice Tea inspired by Chinese and British culinary.

Alcohol

Bhang a wild leaves mix with milk, fruits & jaggery Gorgora local Hukka mix with betel leaves & wild weeds. Mohua alcohol formed from wild flowers Tari alcohol formed from fermented rice

Principles of Taxation 8

Bangladesh

Tax Rates:

Food, Beverage, Bangladesh Income Tax Rate Bangladesh Corporate Tax Rate Bangladesh Sales Tax / VAT Rate

20%

25%

27.5%

15%

According to the 2011 WTO data, Bangladesh's tariff rates on commodities are as follows:
Live animals: 7.3864% Cereals (corn, rice, barley, rye, wheat, etc): 3.5469% Cocoa: 16.7273% Coffee and tea: 23.4731% Sugars (and products): 18.75% Metals: 12.8917% Mineral Fuels (oil, natural gas, coal, etc): 10.7102% The tariff on food products in Bangladesh is 22.5939%, according to the 2011 WTO data.

Principles of Taxation 9

Food & Beverage on Agricultural overview Dhaka & Bangladesh, May 2010
Agriculture is the single most important sector of Bangladesh's economy. Over 80% of the population is engaged in agriculture (70% of the labour force). 57% of the labor force is engaged in the crop sector which represents about 78% of the value addition in the agricultural sector and more than 50% of the population depends on agriculture for their livelihoods. The share of agriculture in GDP has fallen from around 57% in the 1970s to 20% in the last few years. It is also the source of many of the small industrial sector's raw materials, such as jute, and accounts for 10% of the value of all exports. In short, agriculture is one of the driving forces behind economic growth in Bangladesh and, as a result, increasing food and agriculture production have always been major concerns of Bangladeshi policy-makers. With the current economic crisis in the world, food insecurity remains an important issue in Bangladesh. Bangladesh's major crops include: rice, wheat, sugarcane, potatoes, pulses, oilseeds, spices, fruit, beef, milk, and poultry. Rice, with an average 70% share of the gross output value of all crops leads the table. As a result, growth in the agricultural sector essentially mirrors the performance of rice production, although the share of livestock and fisheries has increased steadily in recent years to 22% of the value added in agriculture. Bangladesh's dependence on food imports and, in particular, food aid throughout the years has been a cause for concern. Assuming normal weather conditions, Bangladesh's food grain production in 2010-11 is forecasted to be around 33.3 million tons (32.3 million tons of rice and 1.0 million tons of wheat), up 2 percent from current productions. Imports of food grains are predicted to include 400,000 tons of rice and 2.5 million tons of wheat. In 2009, agri-food imports in Bangladesh represented approximately $1.10B, 4.7% of total imports ($20.53B) and absorb about 10% of total export earnings. The import figure may increase based on country's production year to year. Natural disaster (floods in particular) may cause abnormal increases in imports to the agribusiness sector. The government legislation for agricultural products changes with the country's production and import requirements. For example, the government currently allows tax free import of wheat and pulses due to a significant shortage between demand and level of local production. The Bangladesh Agricultural Research Council (BARC) estimates the future requirement for food grains to be about 45 million tonnes in 2030 compared to 33 million tonnes in 2010-11.

Principles of Taxation 10

Total Bangladesh/Canada agricultural trade was valued at over $542 million in 2009, representing over 86% of Canadian exports to Bangladesh and 38% of total trade between the two countries. Top Canadian agricultural exports to Bangladesh were wheat valued at $246 million accounting over 45% of all agri food exports, and pulses and peas at $242 million or 44% of total agri-food exports. Bangladesh imports large quantities of wheat as it is a staple of the Bangladeshi diet. Consistent demand in this commodity represents an excellent opportunity for Canadian wheat exporters to increase sales. Ukraine and Russia together were Bangladesh's largest wheat suppliers, accounting for over 50% of Bangladesh's wheat imports. Other wheat suppliers include the US, Australia and Argentina. No. 2 Canada Western Red Spring wheat is already established in the market; a variety popular due to its price and quality. The 2009/10 wheat crop, currently in its vegetative stage, is enjoying favorable weather conditions and is estimated to produce 1 million tons from 400,000 hectares of land. Assuming normal weather conditions, wheat production in 2010/11 is forecast at 1.02 million tons with cultivated area remaining the same. Wheat consumption in 2009/10 is estimated at 3.4 million tons, up by about 10 percent from 2008/09. Wheat consumption by middle and high income populations in the urban areas is growing steadily due to changes in food habits and the growth in the hospitality industry. The growing bakery sector is also contributing to the increase in wheat consumption. While coarse wheat flour, known as Atta, is sold in bulk in rural areas, urban millers are marketing packaged refined wheat flour under brand names. In 2010 wheat imports are forecasted to be 2.5 million tons consisting of 500,000 tons public sector imports and 2 million tons private commercial imports. The public sector procurement in Bangladesh is based on price competition therefore suppliers from Ukraine enjoy the greatest success in this procurement. In contrast, the private sector sources much of its wheat from Canada, Australia, Russia and Ukraine. If India continues their wheat export ban, demand for Canadian wheat will remain strong this year as well. Pulses are a very important dietary component of the people of Bangladesh. The major types of pulses grown are lathyrus, lentil, chickpeas, mungbean and blackgram. Pulses are Canada's second largest export to Bangladesh. In 2009, Canada exported over 0.6 million MT of pulses (125,860 MT Red Lentils and 475,000 MT Yellow Peas) worth of over $242 million. Consumption of pulses has been growing faster than local production and has resulted in an increasing amount of pulse crops imported into the country. Canada is the leading supplier of Red lentils and Yellow peas to Bangladesh.

Principles of Taxation 11

Due to the lack of interest by farmers to grow lentils, planted acres have fallen in the last five years at an alarming rate. It is expected that the acreage will continue to shrink further and eventually make Bangladesh a net lentil importing country.

According to the last available statistics, Bangladesh produced 115,000 MT of red lentils in 2007. The main sources of supply of pulses in to Bangladesh are Australia, Turkey, Syria, India and Nepal. India has recently banned all their pulse export to Bangladesh and if this ban continues in the next year, Bangladesh will continue to import pulses from Canada. Oilseeds are Canada's third largest export item to Bangladesh. In 2009, Canada exported over $54 million of oilseeds (canola and master seeds) to Bangladesh. Ukraine, France and Russia are Canada's main competitor for oilseed in the market here. Wheat, pulses and oilseeds imports are currently duty free. There is also no quantitative restriction on imports of these items. The possibility of natural disasters is a constant threat for Bangladesh. The country is particularly vulnerable to sudden floods, cyclones and even droughts. Agriculture growth in 2009/2010 is likely to remain strong due to favorable conditions. However, vulnerability to natural disasters, a heavy reliance on annual rains and adequate supplies of fertilizer for crop performance result in severe fluctuations in food grain production and prices as well as very erratic GDP growth. Bangladesh has an agriculture-dependent economy with a growing population and one of the world's lowest land areas per capita. Not surprisingly, the most important issue in Bangladesh agriculture is to enhance and sustain growth in crop production, the most pressing problem is therefore the current state of stagnating yields and declining productivity in a range of food and non-food crops. Projections of food grain supply and demand are consistent in their conclusions that there is a widening food grain supply gap. With negligible scope for area expansion, as most of the arable lands of Bangladesh are already under cultivation, future growth will have to continue to rely on raising productivity per unit of land. For this reason, continuous efforts are being made towards developing new improved seed varieties. It is also felt that the agricultural sector has by no means exploited its full potential for crop production and that there are various opportunities for substantially increasing cropping intensities. Currently only 45 percent of the potential irrigated area is covered by modern varieties and, most important, there are wide gaps between the potential and the realized yields for all crops in the country.

Principles of Taxation 12

Vat:
VAT is a tax you pay when you buy goods and services in the European Union, including in the UK. If you have to pay VAT on something it will normally be included in the price you see on the shelf. In some circumstances you might be able to get a refund of any VAT you have paid, for example if you live outside the EU and are visiting the UK. Unless there is anything repugnant in the subject or context, in this Acta) "exempted" means goods and services exempted from the added value tax under this Act; b) "output tax" means the added value tax or, as the case may be, the added value tax and additional duties of customs imposed under this Act; c) "inputs" means all kinds of raw materials, services and equipments; but it shall not include labor, land, buildings, small parts of machines, parts of machines, office equipment and vehicles; d) "input tax" means the added value tax payed on articles imported by any registered person or purchased by such person from any other registered person; e) "tax period" means a period of one month or any such period as the Government may, by notification in the official Gazette, specify in this behalf; f) "taxable goods" means any such goods as are not included in the first schedule; g) "taxable services" means the services mentioned in the second schedule; h) "collector" means any collector, added value tax, appointed under section 20; i) "current account" means the account kept by a registered person with a controller in the prescribed form, in which shall be stated in writing his purchases, sales, treasury deposits, payable and remittable added value tax and, if required, other tax; j) "invoice" means the invoice made out under section 32; k) "turnover" means the total amount of money received or receivable by any person at any prescribed time from the supply of taxable goods produced or manufactured by him or the supply of taxable services;

1. Levy of added value tax: (1) The added value tax shall be charged and paid at the rate of fifteen per cent on the
basis of the value stated in section 5 on all goods imported into Bangladesh except the goods mentioned in the First Schedule and on the supply of goods except the goods mentioned in the said Schedule and on all services mentioned in the Second Schedule. (2) Notwithstanding anything contained in sub-section (1), the rate of the tax charged on the following goods or services shall be nil, namely:-

Principles of Taxation 13

a) goods or services which have been or are deemed to have been exported from Bangladesh; b) food and other provisions supplied for consumption outside Bangladesh on any conveyance proceeding from Bangladesh to any foreign destination in accordance with section 24 of the Customs Act, 1969 (IV of 1969), hereinafter referred to as the Customs Act: Provided that this sub-section shall not be applicable in the case of the following goods, namely:i) any goods reimported or intended to be reimported into Bangladesh; ii) any goods which have been cleared for exportation in accordance with section 131 of the Customs Act, but which have not been exported within thirty days after delivery of the bill of export or within the period extended by the Collector. (3) the added value tax shall be paida) in the case of imported goods, by the importer; b) in the case of goods produced or manufactured in Bangladesh, by the supplier; c) in the case of services, by the supplier of the service.

2. Application of rate of tax:

(1) In the case of supply of taxable goods or taxable services, the rate of added value tax shall be the rate applicable on such goods and services at the time mentioned in sub-section (2) or, as the case may be, sub-section (3) of section 6. (2) In the case of importation of taxable goods, the added value tax shall,a) in the case of clearance of such goods for home-consumption, be charged at the rate in force on the date on which the bill of entry is presented under section 79 of the Customs Act: Provided that, where the bill of entry is presented before the arrival of the conveyance on which the goods are imported, the date concerned shall be the date of delivery of the manifest following next to the arrival of the said conveyance; and b) in the case of clearance of such goods from a warehouse under section 104 of the Customs Act, be charged at the rate in force on the date on which the said goods are cleared from the warehouse.

3. Determination of value for charge of added value tax:

(1) In the case of importation of goods, the value on which added value tax is to be paid shall be determined by adding the import duty and other duties, including additional duties of customs, and taxes (if any), excluding advance income tax, to the value chargeable with import duty under section 25 of the Customs Act. (2) Subject to the provision of sub-section (3), in the case of supply of goods, the value on which added value tax is to be paid shall be the price receivable from the buyer by the producer or manufacturer of the said goods, in which shall be included all the expenditures of the producer or manufacturer and, where applicable, all the

Principles of Taxation 14

duties and taxes including commissions, charges and additional duties of customs (excepting advance income tax) paid by him. (3) The Government may, by notification in the official Gazette, specify the goods in respect of which added value tax shall be charged on the basis of the retail price and in the case of charging added value tax the retail price of such goods shall be the price, which shall include all kinds of expenditures, commissions, charges, customs duties and taxes, determined by the producers or manufacturers on consent of the officer concerned, and such goods shall be marked with a special brand or sign and shall be sold to the average consumers at such price (which shall be printed in a distinct, noticeable and irremovable manner on the surface of, or on each package, bag or receptable containing, such goods). (4) In the case of supply of services, added value tax shall be charged on the total receipts: Provided that, in the case of any ordered service, the Board may by rules charge the tax on the basis of the real added value. (5) In the case of goods on which a trade discount has been allowed, the added value tax shall be chargeable on the price at which they are supplied after the allowance of the trade discount: Provided that the price at which such goods are supplied after the allowance of the trade discount shall be mentioned in the invoice and that the amount of the trade discount allowed shall be consistent with the ordinary business practice.

4. Time and manner of payment:

(1) The added value tax on imported goods shall be paid in the same manner and at the same time as the import customs in accordance with the Customs Act and the rules made thereunder as if it were an import tax under the said Act; and the rules, orders or directions passed or issued under the said Act shall, subject to the rules, orders or directions, if any, passed or issued under this Act for the purpose of regulating any matters relating to such added value tax or, as the case may be, additional duties of customs, be, as far as is possible, applicable to the added value tax or, as the case may be, additional duties of customs in the same manner as they are applicable to the import tax. (2) The added value tax on goods produced or manufactured by any registered or registrable person for the purpose of conducting or furthering a business shall be paid at the time of such of the following operations as occurs firsta) when the goods are delivered or supplied; b) when the invoice regarding the supply of the goods is made out; c) when any goods are used privately or are supplied for any other use; d) when the price is received in part or in full. (3) The added value tax on services supplied by any registered or registrable person in the course of conducting or furthering a business shall be paid at the time of such of the following operations as occurs firstPrinciples of Taxation 15

a) when the service is supplied; b) when the invoice relating to the supply of the service is made out; c) when the price is received in part or in full. (4) Notwithstanding anything contained in this section, the Board may, in such manner as may be prescribed by rules, determine the time at which and the manner in which added value tax or, as the case may be, additional duties of customs is to be paid in respect of any goods, classes of goods and services. (5) Added value tax and additional duties of customs on the supply of goods produced or manufactured in Bangladesh and added value tax paid on services shall, in such manner as may be prescribed by rules, be paid from the current account or stated in the return, respectively.

5. Levy of additional duties of customs:

(1) There shall be paid additional duties of customs at the rate stated in the Third Schedule on such luxury articles, unnecessary and socially undesired goods and services stated in the said Schedule as are supplied in or imported into Bangladesh. (2) For the purpose of charging additional duties of customs, the value of goods and servicesa) shall, in the case of imported goods, be the value on which is levied import tax under section 25 of the Customs Act for the purpose of levying import tax; b) shall, in the case of goods produced or manufactured in Bangladesh, be the consideration, which shall not include the added value tax and additional duties of customs, received or receivable by the producer or manufactorer from the buyer of such goods; (3) Additional duties of customs are to be paid at the same time and in the same manner as is to be paid added value tax.

6. Turnover tax:
(1) Every producer or manufacturer of taxable goods or supplier of taxable services who is not subject to registration under section 15 shall pay a turnover tax at the rate of two per cent of his annual turnover. (2) The highest amount of turnover tax to be paid on turnover, the schedule of payers of turnover tax, the assessment of the turnover tax to be paid and the manner of its realization, appeals against assessments, offences and punishments, the detention, adjudication, confiscation of goods and imposition of fines and all appeals in respect thereof, the powers of the officers concerned, audits, the realization of underpaid or outstanding tax, the refinement of erroneously paid or overpaid tax and other matters concerned shall be prescribed by rules.

Principles of Taxation 16

7. Deduction of tax:
(1) Suppliers of taxable goods or suppliers of taxable services may, subject to the provision of sub-section (2), credit input tax against the output tax payable on the supply of goods produced or manufactured by them or on services rendered by them: Provided that, in the case of expensive materials, the input tax shall be deducted in such manner as may be prescribed by rules. (2) No supplier of taxable goods or taxable services shall be eligible for deduction of input tax unless he holds an invoice proving that he has paid the added value tax payable on equipments or a bill of entry proving that he has paid the added value tax applicable on importations; and if any person makes an deduction without (such) proof, the officer concerned may annul such deduction and direct such adjustment in the current account or the return as may be required. (3) Any supplier of taxable goods or taxable services who also supplies goods or services on which no added value tax is to be charged, may, in such manner as may be determined by rules, credit such proportion of the input tax against the output tax as is attributable to the inputs used in the production or manufacture of goods, or in services, on which added value tax is to be charged.

8. Exemption:
(1) The Government may, by notification in the official Gazette, subject to limits and conditions mentioned therein, exempt the import or supply of any goods or classes of goods or any services supplied from added value tax or, as the case may be, additional duties of customs chargeable under this Act. (2) The Board may, by special order, on statement of the reasons in each case, exempt the import or supply of any taxable goods or any taxable services supplied from added value tax or, as the case may be, additional duties of customs chargeable under this Act.

9. Appointment of added value tax officers:

For the purpose of giving effect to this Act and rules, the Board may, by notification in the official Gazette, appoint for any area mentioned in the notification any person asa) Collector, Added Value Tax; b) Collector (Appeal), Added Value Tax; c) Additional Collector, Added Value Tax; d) Joint-Collector, Added Value Tax; e) Sub-Collector, Added Value Tax; f) Assistant Collector, Added Value Tax; g) Superintendent, Added Value Tax; or h) added value tax officer of any other rank. Principles of Taxation 17

Food & Beverage:

1 General: 1.1 This Information Leaflet sets out the rates of VAT on supplies of food and beverage. 1.2 Most food and beverage sold by retail shops is chargeable to VAT at the zerorate. This includes most basic foodstuffs, for example, bread, butter, tea, sugar, meat, milk, vegetables etc. Certain items of food and beverage are specifically excluded from the scope of the zero-rate. These are taxable at the standard and reduced rates of VAT. Food liable at the reduced rate includes flour or egg based bakery products e.g. cakes, crackers, certain wafers and biscuits. Food and beverage liable at the standard rate includes sweets, chocolates, confectionery, crisps, ice-cream and soft drinks. In addition food and beverage liable at the standard rate includes:

frozen desserts, frozen yogurts and similar frozen products, and prepared mixes and

powders for making any such product or similar products; uncooked confectionery; savory snack products made from cereal or grain, fried bread segments, pork scratching,

and similar products and Soft drinks and alcohol.

2 Food and beverage supplied in the course of operating a catering business (including Vending Machines, Take-Always, and Supermarkets): 2.1 Food and beverage normally chargeable to VAT at the zero-rate becomes liable to VAT at the reduced rate when supplied in the course of operating hotels, restaurants, cafes, canteens, public houses, caterers and other similar businesses or by means of vending machines. 2.2 Food and beverage normally liable to VAT at the standard rate becomes liable at the reduced rate when supplied in the course of provision of a meal by any of the specified classes of business (see preceding paragraph) excluding alcohol, soft drinks and vegetable juice. 2.3 Alcohol, soft drinks, bottled waters and health drinks are liable to VAT at the standard rate in all circumstances. 2.4 All hot take-away food is liable at the reduced rate irrespective of the rate which would apply if it were supplied otherwise

Principles of Taxation 18

2.5 Vending machine sales of zero-rated food and beverage are liable at the reduced rate. Food and beverage other than zero-rated food and beverage sold by means of a vending machine are taxable at the appropriate rates e.g. cakes the reduced rate, confectionary the standard rate. 2.6 Zero-rated food and beverage remains free of VAT so long as it is not supplied by means of a vending machine or in the course of operating any of the specified classes of business 2.7 Cold take-away food and beverage supplied by supermarkets, etc. are taxable at the zero, reduced or standard rate, as appropriate 3 Summary: The rates of VAT appropriate to the supply of food and beverage through the various outlets are set out below. A tabular summary is attached. 4 Retail shops including supermarkets: 4.1 Food and beverage supplied by retail shops is liable at the zero, reduced or standard rate as appropriate. The supply of freshly baked bread which may have retained some heat after baking but which has not been maintained heated and which is supplied in the course of a grocery business is liable at the rate appropriate to the same food when cold. However, hot food, including hot cooked chickens is liable to VAT at the reduced rate. 4.2 Supermarkets which operate restaurants or cafs are generally regarded as carrying on a separate restaurant business. Food and beverage supplied in the course of the restaurant business is normally liable at the reduced rate. This includes fruit juices, ice cream, and confectionery supplied in the course of the provision of a meal (but the supply of such foods for taking away is liable at the standard rate). As already stated alcohol, bottled waters and soft drinks other than fruit juices are always liable at the standard rate. 4.3 Food and beverage sold by means of vending machines is liable at the reduced rate or standard rate, as appropriate. The zero-rate never applies and food and beverage which might otherwise be zero-rated is liable at the reduced rate when sold by means of vending machines. The sale of zero rated food and beverage by means of a vending machine is considered to be a service for VAT purposes. 5 Hotels, Restaurants, Cafs, Canteens, Public Houses, Caterers and Similar Businesses: 5.1 Food and beverage, including fruit juices, supplied with a meal, but excluding alcohol, bottled waters, soft drinks and vegetable juice is liable at the reduced rate. This is so even if the food or drink would have been liable at the standard rate if supplied otherwise (for example, fruit juice or ice cream, liable at the standard

Principles of Taxation 19

rate, is liable at the reduced rate when supplied in the course of the provision of a meal). 5.2 Alcohol, bottled waters and soft drinks are liable at the standard rate in all circumstances. 5.3 Staff meals, when taxable, are liable at the reduced rate. 5.4 Receipts from admissions to dinner dances are liable at the standard rate including the dinner element in the charge. If there are separate charges for the dinner and the dance and payment of the charge for dinner is not a condition of admission to the dance the dinner charge is liable at the reduced rate and the charge for admission to the dance is liable at the standard rate 6 Take-aways: Traders whose business consists entirely of take-aways: 6.1 Food and beverage supplied will be taxable as follows:

Hot take-away food and beverage the reduced rate. Cold take-away food and beverage zero %. (E.g. sandwich/cold milk) or the reduced rate.

(E.g. cold apple tart) or standard (e.g. chocolate bar), as appropriate.

Alcohol, bottled waters and soft drinks the standard rate.

6.2 If cold take-away zero-rated food or drink is supplied with hot take-away food for an inclusive price (for example, coleslaw with hot chicken) the entire charge is liable at the reduced rate. Soft drinks supplied with hot take-away food for an inclusive price are liable at the standard rate. It will be open to the proprietor of a take-away business to charge separately for the different constituents of a take-away meal and to pay tax accordingly. 6.3 The term hot take-away food and beverage should be understood as including cooked food which is supplied while hot for the purpose of consumption while hot, that is, at a temperature above the ambient air temperature. It includes items such as burgers which consist of hot meat enclosed in a cold bun, cooked chickens and similar food. The term does not include freshly baked bread which may be hot at the time of purchase.

7 Take-aways: Traders whose business does not consist entirely of take-aways: Although, strictly, zero-rated food supplied in the course of operating a hotel, restaurant, public house, canteen or similar business is liable at the reduced rate, application may be made to the Revenue District responsible for your tax affairs to have the take-away activities treated concessional as a separate activity and, to the extent that the take-aways consist of zero-rated food, relieved accordingly.

Principles of Taxation 20

8 Waste foods: 8.1 Waste food of all kinds which is sold as animal food may be regarded as qualifying for the zero-rate of VAT. 8.2. Waste oils sold for reprocessing are liable to VAT at the standard rate. 9 Location Catering: This service is liable at the reduced rate but alcohol, bottled waters and soft drinks supplied are liable at the standard rate. 10 Catering on off-shore oil rigs outside territorial waters and on foreign-going ships and aircraft: The zero-rate effectively applies. 11 Catering in schools and hospitals: Catering services are exempt from VAT where supplied a. to patients of a hospital or nursing home in the hospital or nursing home; and b. to students of a school in the school.

Further information: Enquiries regarding any issue contained in this Information Leaflet should be addressed to the Revenue District responsible for the taxpayer's affairs.

Food and Beverage Regarding Tax:

Guidelines for the tax on prepared food and beverages:
The Prepared Food and Beverage Tax (Meals Tax) was established by Ordinance No. 28631 and was adopted by the City Council on May 18, 1987. In the case of any conflict between these guidelines and the provisions of the City Code (1979), as amended, or other ordinances, the Code or ordinance will prevail.

Principles of Taxation 21

Food and beverage: Rates of VAT:

Food and beverage: Rates of VAT Type of Food or How supplied Beverage With meals inBy hotelBy means ofBy retailBy 'takehotels, other thanvending stores(see away' only restaurants, with meals machines note) business canteens, pubs etc. All food and reduced beverage except alcohol and soft drinks Zero-rated food reduced reduced, standard reduced, standard 0%, reduced, standard 0%, reduced, standard

reduced

reduced

0% (cold),0% (cold), reduced reduced (hot) (hot) reduced reduced

Cakes, biscuits reduced (other than chocolate covered biscuits) Chocolates, reduced confectionary, chocolate biscuits, crisps, ice cream Alcohol, bottled standard waters and soft drinks including health drinks Fruit Juices reduced including freshly squeezed juices 'Take-aways' - hot 'Take-aways' - cold

reduced

reduced

standard

standard

standard

standard

standard

standard

standard

standard

standard

standard

standard

standard

reduced 0%, reduced, standard reduced, standard

reduced 0%, reduced, standard reduced, standard

reduced 0%, reduced, standard reduced, standard

'Take-aways' - hot and cold for inclusive price

Principles of Taxation 22

Food and beverage: Rates of VAT Type of Food or How supplied Beverage With meals inBy hotelBy means ofBy retailBy 'takehotels, other thanvending stores(see away' only restaurants, with meals machines note) business canteens, pubs etc. Chips (cooked) Dinner Dances Service Charges reduced standard reduced reduced reduced reduced

Note: Retail Stores including supermarkets This information leaflet which sets out the current practice at the date of its issue is intended for guidance only and does not purport to be a definitive legal interpretation of the provisions of the Value-Added Tax Act 1972.

VAT Rates (Current and Historic):

Current and Historic VAT Rates Date Effective From Standard Rate (%) Reduced Rate (%) 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 Second Reduced Rate (%) 9 9 Farmers' flat-Livestock (%) rate addition (%) 5.2 5.2 5.2 5.2 5.2 4.8 4.4 4.3 4.8 4.8 4.8 4.8 4.8 4.8 4.4 4.3

1 January 23 2012 1 July 2011 21 1 January 21 2010 1 December 21.5 2008 1 January 21 2007 1 January 21 2005 1 January 21 2004 1 January 21 2003

Principles of Taxation 23

Current and Historic VAT Rates Date Effective From Standard Rate (%) Reduced Rate (%) 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 16 12.5 10 10 10 10 10 10 23 5,8,18 5 5 12.5 Second Reduced Rate (%) Farmers' flat-Livestock (%) rate addition (%) 4.3 4.3 4.2 4.0 3.6 3.3 2.8 2.5 2.7 2.3 2.3 2 1.4 1.7 2.4 2.2 2 4.3 4.3 4.2 4.0 3.6 3.3 2.8 2.5 2.7 2.3 2.3 2 1.4 1.7 2.4 2.2 2

1 March 21 2002 1 January 20 2001 1 March 21 2000 1 March 21 1999 1 March 21 1998 1 March 21 1997 1 March 21 1996 1 March 21 1993 1 March 21 1992 1 March 21 1991 1 March 23 1990 1 March 25 1989 1 March 25 1988 1 May 1987 25 1 March 25 1986 1 March 23 1985 1 May 1984 35

Principles of Taxation 24

Current and Historic VAT Rates Date Effective From Standard Rate (%) Reduced Rate (%) 23 23 23 18 15 Second Reduced Rate (%) 5,18 5,18 5,18 Farmers' flat-Livestock (%) rate addition (%) 2 2.3 2.3 1.8 1.5 2 2.3 2.3 1.8 1.5

1 July 1983 35 1 May 1983 35 1 March 35 1983 1 May 1982 30 1 25 September 1981 1 May 1980 25 1 March 20 1979 1 March 20 1976 1 March 19.5 1975 3 19.5 September 1973 1 16.37 November 1972

10 10 10 6.75

1 1 Discontinued

1 1 Discontinued

Suspended inSuspended in relation to liverelation to live cattle cattle 1 1

6.75

5.26

Abolished/Repealed VAT Rates:

Increased Rates (Discontinued with effect from 1 March 1979) Effective From Applied to radios, TV sets, recordApplied to passenger motor players and records vehicles 35 36.75

1 March 1976 40 1 March 1975 36.75

Principles of Taxation 25

Increased Rates (Discontinued with effect from 1 March 1979) Effective From Applied to radios, TV sets, recordApplied to passenger motor players and records vehicles 36.75 30.26

3 September 36.75 1973 1 November 30.26 1972

The standard rate applied to these goods from 1 March 1979 Special Rates: A special rate of 11.11% applied to dances from 1 November 1972 was abolished on 1 March 1976. A special rate of 10% which continued in relation to domestic dwelling development contracts entered into before 25 February 1993 was repealed on 23 November 2010.

What is the prepared food and beverage tax?

Effective August 1, 1987, a tax was levied on the purchase of all prepared food and beverages served in and from these places of business:

Restaurants Eating Houses Dining Rooms Eateries Grills Bowling Alleys Coffee Shops Drug Stores Cafeterias Lunch Wagons/Lunch Trucks Cafes Pushcarts Snack Bars Carry-Out

Confectioneries Food Concessions Bakeries Motels Hotels Doughnut Shops GroceryStore Delicatessens Carnivals Ice Cream Stores Dinner Theaters Movie Theaters Festivals Bed & Breakfast Inns Private Clubs

Who collects the prepared food and beverage tax?

All businesses that come under the definition of restaurant or caterer and that are listed above must collect this tax from their customers when the charge for the food

Principles of Taxation 26

and beverages is paid. The tax is to be paid whether the customer pays by cash or by credit card. The seller adds the tax to the gross amount and collects the total from the customer. SELLERS MUST NOT in any way suggest or indicate that they will relieve the customer of payment of part or all of this tax. The customer alone must pay the total tax amount due.

Are tips taxable?

In the past, tips were taxable when added to the price of food or automatically added onto the bill. An amendment to the Code of Virginia effective July 1, 2006 states that gratuity, service charges or tips that are mandatory or automatically added to the price of a meal by the seller are not subject to the Meals Tax unless the service charges or tips are in excess of 20%. This exemption only applies if the service charge added to the price of the meal does not exceed 20%. Those service charges or tips that are 20% or more and added to the price of the meal remain subject to the Meals Tax. Monthly remittance: The seller must complete and sign a monthly report indicating the amount of the food and beverage charges collected and the tax required to be reported. All forms will be provided at NO CHARGE with a return envelope. If the forms are delivered in person, they must be received by the City Treasurer's Office on or before the 20th of the month. If the forms are mailed, they must be postmarked on or before the 20th of the month. Currently, coupon booklets are provided to sellers for reporting and remittance.In either case, if the 20th of the month falls on a weekend or holiday, the next business day becomes the due date. Records retention: The seller must retain for three years auditable records of: 1. Gross Receipts for all food and beverages, records of food and beverage purchases, records of spoilage, waste or any other purchases to support the food and beverage operation. 2. Amount charged the buyer for each purchase. 3. Date of each sale, deposit records, cash register tapes, voids, daily worksheets, etc. 4. The amount of tax collected from each sale. 5. Exempt sales.

Closing of a business: If you should close your business or that part of your business that is applicable to this tax, you must IMMEDIATELY complete your tax remittance and pay all taxes due.

Principles of Taxation 27

You must also complete the reverse side of the remittance form and list the New Owner's Name and Address, if known and applicable. Catering businesses located outside of the city of Roanoke: On February 4, 1991, Ordinance 30394-20491 amended the Code of the City of Roanoke to provide that the situs for meals taxation is the locality in which the sale is made. Section 32-284 states that "the tax is levied and imposed on the purchaser of all food sold in the city . . . or by a caterer regardless of place of delivery or consumption." Therefore, catering businesses located inside the City of Roanoke must collect the tax and remit it to the City even if the food is delivered to a destination outside of the City of Roanoke. However, when mobile trucks, booths or caterers with businesses located outside the City of Roanoke set up to sell or prepare food in the City of Roanoke, they are liable to the City for the tax. Catering businesses located outside of the City of Roanoke are not required to collect and to remit the tax to the City unless they establish a point of sale within the City such as a mobile truck, booth, pushcart, etc.. or they prepare and cook food within the City. The Prepared Food and Beverage Tax does not apply to catering services such as rental of tablecloths, napkins, flower arrangements, candles, etc.

Exemptions:
Snack Foods are not taxable by this Ordinance. The term "snack" includes items such as:

Unopened bottled or canned drinks Chewing Gum Candy Popcorn (packaged for home consumption) Peanuts and other nuts Unopened bags of prepackaged or factory sealed chips, popcorn etc And other items of a similar nature consumed as a snack.

The following purchases of food are not subject to this tax:

Foods furnished by restaurants to employees as part of their compensation when no charge is made to the employee. Foods sold by non-profit day care centers, public or private elementary or secondary schools or foods sold by any college or university to its students or employees. Foods for use or consumption by the Commonwealth, any political subdivision of the Commonwealth, or the United States.

Principles of Taxation 28

Foods furnished by a hospital, medical clinic, convalescent home, nursing home, home for the aged, infirm or handicapped or other extended care facility to residents thereof. Foods furnished by non-profit charitable organizations to the elderly, infirm, handicapped, or needy persons in their homes or at central locations. Foods sold by non-profit, educational, charitable or benevolent organizations on an occasional basis. Any other sale of food ordered exempt by the Virginia Retail Sales and Use Tax Act.

Penalties:
If the tax remittance and report is not received in the City Treasurer's Office a 10% penalty will be assessed if the failure is not for more than 30 days and a 20% penalty will be assessed if the failure is not for more than 60 days. The penalty will be not exceeding 25% and the minimum penalty is $2. The penalty for filing a false or fraudulent report is fifty percent (50%) of the amount of tax due. Failure to comply with any provision of the Tax on Prepared Food and Beverages Ordinance constitutes a Class 1 misdemeanor. Agreements to pay delinquent taxes in installments do not relieve you of criminal liability until the taxes and penalties are paid in full.

Examples of items not taxable:

Unopened bottle, can or six-pack of beer or bottled wine purchased for off premises consumption. Chewing gum purchased at a restaurant. Church supper prepared by a church on an occasional basis. Cold unopened drink from a case at a convenience store. Food provided to a patient in a hospital or nursing home Food purchased as part of a rescue squad or church fund-raising effort on an occasional basis. Frozen TV dinner or grocery item purchased in a grocery store. Pre-sealed, pre-packaged sweet roll purchased from a snack bar or a cafeteria. For example, "Tasty Kake" cinnamon bun, "Little Debbie" brownies or "Rainbow" honey buns.

Principles of Taxation 29

Peanuts or other nuts from a peanut or candy shop. Candy from a movie theater. Vending machine sales.

Examples of taxable items:

Baked, fried, or barbecued turkey, chicken, seafood or ribs from a restaurant, delicatessen or grocery store delicatessen for on or off premises consumption. Beer, wine or mixed drinks at any bar, tavern, or restaurant. Beer, wine or mixed drinks delivered to hotel or motel rooms or any "room service" food. A church supper provided by a caterer. Cup of coffee. Doughnuts served and eaten on premise (non packaged). Food and beverages at a country club or private club. Food and beverage at a company or hospital cafeteria. Fountain drink from a fast food chain or movie theater. Hot dog from a convenience store or pushcart.

Exemptions; limits on application:

A. The tax imposed under this article shall not be levied on the following items when served exclusively for off-premises consumption: (1) Factory-prepackaged candy, gum, nuts and other items of essentially the same nature. (2) Factory-prepackaged donuts, ice cream, crackers, nabs, chips, cookies and items of essentially the same nature. (3) Food sold in bulk. For the purposes of this provision, a "bulk sale" shall mean the sale of any item that would exceed the normal, customary and usual portion sold for on-premises consumption (e.g., a whole cake, a gallon of ice cream); a bulk sale shall not include any food or beverage that is catered or delivered by a food establishment for off-premises consumption. (4) Alcoholic and nonalcoholic beverages sold in factory-sealed containers.

Principles of Taxation 30

B. A grocery store, supermarket or convenience store shall not be subject to the tax except for any portion or section therein designated as a delicatessen or designated for the sale of prepared food and beverages. C. The tax imposed hereunder shall not be levied on the following purchases of food and beverages: (1) Food and beverages furnished by food establishments to employees as part of their compensation when no charge is made to the employee. (2) Food and beverages sold by day-care centers, public or private elementary or secondary schools or food sold by any college or university to its students or employees. (3) Food and beverages for use or consumption and which are paid for directly by the Commonwealth, any political subdivision of the Commonwealth or the United States. (4) Food and beverages furnished by a hospital, medical clinic, convalescent home, nursing home, home for the aged, infirm, handicapped, battered women, narcotic addicts or alcoholics or other extended care facility to patients or residents thereof.

Food and beverage Tax Calculator:

Figuring out food and beverage tax are actually very simple if you know how. Most businesses use some form of food and beverage tax calculator as food and beverage tax are required to be charged to customers for most types of goods and in most states. These calculators are usually pre-programmed with the food and beverage tax percentage to enable the food and beverage tax to be calculated with the simple push of a button. The food and beverage tax percentage, as well as which goods are actually taxed, varies from state to state. Some states have food and beverage tax on food; others dont tax food but they do tax everything else. Prices that you see at stores may or may not already include the food and beverage tax. For instance, if you buy clothing, the food and beverage tax are generally not included; however, if you buy gasoline, you probably know that the food and beverage tax are already added into the price listed on the pump.

Calculating Food and beverage Tax:

Food and beverage tax are calculated by taking the total price of the product and multiplying by the food and beverage tax percentage. You then take the results and add it to the product price to get the total price for the product. For example, consider a product that costs $1.00 and is purchased in a state with 6% food and beverage tax. You would take $1.00 and multiply by 0.06 to come up with $0.06. You would then would add the $0.06 to the $1.00, which would be $1.06, which would be the total price for the product. This site provides an online food and beverage tax calculator that can be used in two different ways. On the first tab, you can enter the total price of you purchase, and then

Principles of Taxation 31

select which state you are purchasing those goods in. The calculator will inform you of the food and beverage tax based on the food and beverage tax percentage for that state. On the second tab of the food and beverage tax calculator, you can manually enter the food and beverage tax percentage to come up with the correct results. Both tabs use the same formula, but if you do not know what the food and beverage tax percentage is for your state, you can simply select the state you live in to automatically calculate the food and beverage tax.

Food and beverage Tax Differences With Different States:

It is very important that you select the correct state because every state has a different food and beverage tax percentage. Some states tax everything that you buy. Others dont tax food. Some states require merchants to collect food and beverage tax for online food and beverage if they have part of their company or an affiliate in that state. The items that are taxed vary widely. For instance, Michigan food and beverage tax are 6%. They do not tax food that you buy in a grocery store. But they do tax food from a restaurant, such as McDonalds or Pizza Hut. If you are renting a hotel room, you are also charged food and beverage tax. Connecticut also charges a 6% food and beverage tax, however the Connecticut law reads that food products for human consumption are exempt from food and beverage tax, but there are exceptions to this. Beer, wine and liquor are taxed. Beverages, such as soft drinks, that are dispensed from a fountain or a bar are also taxable. Items sold in vending machines are exempt from food and beverage tax. Anything else that is not edible has food and beverage tax on it. Some candy is also taxable. There is also tax on meals that you eat at restaurants or any prepared meal. It depends on what state you are in as to how much food and beverage tax are applied and what it is applied to. If you are selling things or buying things in several different states, you should be aware of the food and beverage tax laws. Cash registers can generally be programmed to account for these discrepancies in the food and beverage tax law. Some cash registers require you to press one subtotal item if the good is taxable and another if the good is not. Some newer systems know if food and beverage tax needs to be charged or not based on the SKU of the item. It is important to know the individual food and beverage tax calculator laws for the state you live or work in. States change the amount of food and beverage tax there is on items from time to time, so it is important to keep up to date. Try our Food and beverage Tax Calculator today!

Tax Liability Calculation: Examples:

Total income of X Company is 20, 50,500 taka.

Principles of Taxation 32

X companys tax liability is given below:

Mr. X Income Year: 2010-2011 Assessment Year: 2011-2012 Calculation of Tax liability

Step
1st Next Next Next Rest

Taka
1,80,000 3,00,000 4,00,000 3,00,000 8,70,500

Rate
0% 10% 15% 20% 25%

Amount
0 30,000 60,000 60,000 2,17,625 3,67,625

Findings:
Positive sight: This system gain the property from person to person on legal way; It provides legal documents on buy and sales ; When it maintain the level of people living it maintain the society living scale ; Increase the country welfare fund; It helps the business sector to concern about food and beverage; Maintain the rules and regulatory in food ad beverage business sector;

Principles of Taxation 33

Negative sight: Tax requirement on food and beverage are not available; Less awareness for low publicity; Remain backward than other country; Use of website are poor; Govt. are unconcern to providing information;

Advantages: Rise govt. fund Increase well monitoring to all sectors by govt. Increase the bindings with govt. and business holder Capital use for public welfare

Disadvantages: Avoid the tax fee for high rate Hidden tax or indirect tax are effect the general people Intentionally people want to avoid tax.

Conclusion:
The food and beverage industry includes a vast amount of venues. It is a very diverse industry consisting of commercial operations and non-commercial operations. Commercial operations can be classified as either part of the restricted market or the general market. Examples of the restricted market would be some institutional employee catering, or private clubs. These may also fall under the subsidized category of either private or public ownership which may include employee catering or institutional catering. These foodservice operations financial goal does not involve generating profit from the sales of food and beverage product, and may also be called institutional foodservice.

References:

Principles of Taxation 34

Annual report of tax policy on food and beverage in Bangladesh. Bangladeshi Cuisine - Shawkat Osman - Google Boeken. Bangladesh - Mariam Whyte, Yong Jui Lin - Google Books Bangladesh - Stuart Butler - Google Books. http://en.wikipedia.org/wiki/Food_and_Beverage. http://jessicamudditt.com/2011/07/10/special-report-supermarket-sob-story http://www.ai.org/dor/3330.htm http://www.americasfoodandbeverage.com http://www.bls.gov/ooh/food-preparation-and-serving/food-and-beverageserving-and-relatedhttp://www.fsg.org/Portals/0/Uploads/Documents/PDF/Role_of_Food_and_B everage_Sector_in_Eco http://www.google.com http://www.guardian.co.uk/money/2012/may/29/vat-what-how-much-why http://www.irs.gov/irm/part4/irm_04-023-007.html http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/taxguides/meals-tax-guide.html http://www.reuters.com/article/2012/10/19/us-obesity-who-industryidUSBRE89I0K62012http://www.wisegeek.com/what-does-a-food-andbeverage-director-do.htm http://www.thefreedictionary.com/tax http://www.wakegov.com/tax/business/preparedfood/pages/default.aspx1019 http://www2.dupont.com/food-beverage/en-us/fb/index.htm Multicultural Handbook of Food, Nutrition and Dietetics - Google Books Tax policy on food and beverage in Bangladesh. Website: annual report of tax policy on food and beverage. World and Its Peoples: Eastern and Southern Asia - Marshall Cavendish Corporation - Google Books

Principles of Taxation 35