Value Added Tax

(i) VAT is imposed on goods and services at import stage, manufacturing, wholesale and retails levels; (ii) A uniform VAT rate of 15 percent is applicable for both goods and services; (iii) 15 percent VAT is applicable for all business or industrial units with an annual turnover of Taka (iv) Turnover ta! at the rate of " percent is leviable where annual turnover is less than Taka (v) VAT is applicable to all domestic products and services with some e!emptions; (vi) VAT is pa#able at the time of suppl# of goods and services; (vii) Ta! paid on inputs is creditable$ad%ustable against output ta!; (viii) &!port is e!empt; (i!) 'ottage industries (defined as a unit with an annual turnover of less than Taka valued up to Taka (,)),)))) are e!empt from VAT; million and with a capital machiner# million; million and above;

(!) Ta! returns are to be submitted on monthl# or *uarterl# or half #earl# basis as notified b# the +overnment, (!i) -upplementar# .ut# (-.) is imposed at local and import stage under the VAT Act, 1//1, &!isting statutor# -. rates are as follows0 (a) 1n goods0 )2, (52, 352, 1))2, 5)2 4 (5)2 (b) 1n services0 1)2, 152 4 (52, Tax Base for VAT: Import Stage: Domestic/Local Stage: 'ustoms Assessable Value 5 'ustoms dut# 5 -upplementar# .ut# a) +oods (manufacturing)0 67roduction cost 5 7rofit and 'ommission (if an#) 5 -upplementar# dut# (if an#)8 b) -ervices0 6total receipts e!cluding VAT but including supplementar# dut# (if an#)8

Truncated Base / Fixed Value Addition: 9n some of the cases of goods and services producers and sellers face difficulties in availing VAT credit$ad%ustment facilities due to non availabilit# of invoices from the sellers of input, 9n order to remove this operational difficult# fi!ed bases such as 1)2, 52, ()2, and 3)2 value addition is taken into account for calculation of VATfor a number of goods and services, 9n such circumstances net VAT ratefor different rates of value addition comes to 1,52, , 52, ",52 and /2, VAT at the wholesale and retail stage: 9n case of wholesalers and retailers, there is a special provision for a 1,52 percent VAT known as Trade VAT on the total sale, provided that the wholesaler$retailer do not avail the facilit# of input credit$ad%ustment, -uch ta! is also collected at the import stage from importers of finished goods as an advance trade VAT, Tariff Value for imposition of VAT: :nder the VAT ;aw, the government is empowered to fi! Tariff Value for some items for the collection of VAT, &!ample0 tariff value for mild<steel products produced from imported$locall# procured re<rollable scraps is T= "))),)) per >T, ?ormal VAT input credit is also not available under this s#stem,

Deduction of VAT at source: As deduction at source is also practiced in case of VAT on certain services, +overnment, -emi<+overnment, Autonomous @odies, ?+1s, @anks, 9nsurance 'ompanies and ;imited 'ompanies are authoriAed b# the government to deduct applicable VAT on the services at source, xcise Dut!0 At present e!cise dut#applies to onl# two items0 bank depositsand domestic air ticket (Tk, 5) per %ourne#),