জীবন বিমার প্রিমিয়াম, [স্বামী, স্ত্রীর…
♣ What is VAT?
VAT is the abbreviation of Value Added Tax. In Bengali it is called value added tax. The amount of value added at various stages of a product or service is taxed by the concerned persons. However, VAT is ultimately borne by the consumer.
★ VAT is a type of indirect tax. It was launched in our country in 1991.
This tax system called VAT is decades old. The journey of VAT began in Europe in the sixties. It exists under different names in different countries. For example, in our neighboring India, its name is GST (Goods and Services Tax).
♣ What is the difference between VAT and tax?
★ Income Tax means Income Tax and Value Added Tax is abbreviated as VAT i.e. Value Added Tax (Musak). The government has to pay certain taxes on the income earned by an organization, an employee or a businessman within certain limits. However, there is a difference between the two words tax and VAT. The tax paid on fixed income is called income tax. And value addition, that is, the value added to a product, the tax to be paid on it, is called value added tax or VAT for short.
♣ Four levels of VAT?
Finance Minister AHM Mustafa Kamal has announced the introduction of new VAT law in the proposed budget of the new financial year (2019-20). This law will be implemented from July 1. However, some parts will be implemented from the day of budget announcement. Many amendments have been brought in the Act in view of the demands of traders. There are four levels of VAT in the new law. These are 5, 7 and a half, 10 and 15 percent. Consumers will have to pay VAT at that rate on various services and products. As the new law has brought various services and products under VAT, VAT rates have been increased in many sectors. At the same time, the VAT rate has been reduced on several products. Several sectors have been exempted from VAT.
Arrangements have been made to set up electronic fiscal devices to collect VAT from traders. Through this, traders will be directly connected with the VAT server. As soon as a buyer pays VAT, it will be credited to the government treasury. Many VAT matters can be done online under the new law.
Sectors which are subject to 15 percent VAT are eligible for concession. To keep small and marginal traders out of the ambit of VAT, traders with annual turnover of up to Tk 50 lakhs have been exempted from the ambit of VAT. Annual turnover from Tk 50 lakh to Tk 3 crore will have to pay turnover tax at the rate of 4 percent.
The VAT registration limit has been raised from Tk 80 lakh to Tk 3 crore. The VAT rate at the local business level will be 5 percent. VAT rate on medicines and petroleum products is being reduced from 2.5% to 2%.
Investors in government priority projects, Bangladesh Economic Zone and PPP projects are exempted from VAT. At the same time, VAT and supplementary duties have been waived in some industrial sectors including heavy engineering industry, export oriented industry, automobile, freezer, air conditioner, motorcycle, mobile industry.
In the old VAT Act, tariff rates were maintained on 86 products of daily use including LP gas, powdered milk, powdered masala, tomato ketchup, chutney, fruit juice, toilet tissue, tubelight, eyeglass frames. The new law imposes 5 percent VAT on these products at the manufacturing stage instead of the tariff value. Due to this, the price of these products may increase.
VAT has been imposed at the rate of 5 percent on a total of 55 products in the budget. Earlier tariff value was maintained on these. As a result, their prices will also increase. Apart from this, VAT has been imposed on some products which were exempted from VAT.
♣ 5 percent VAT on all goods and services
Plastic Appliances, CR Coil, GI Wire, Star, Screws, Aluminum Appliances, Blades, Transformers, Tubelights, Spectacle Frames, Sunglasses, Reading Glasses, Mattresses. Besides broadband internet, indenting, furniture, AC cabin for launch, transport contractor, gold and silver jewellery, English medium school, information technology dependent services and electricity bill.
In the proposed budget, the provision of financial rewards has been kept in the new VAT Act to encourage the work of VAT officials. A new clause has been added for this purpose. Besides, provision has been made for the formation of funds to ensure the award. A provision has been made to create a fund for award and performance incentives with 50% of the revenue collected under it. While the budget includes provisions for rewards for VAT officials, there is no provision for punishment for those involved in harassment and dishonest practices of traders. On the contrary, the provision of immunity has been kept.
A new clause has been added in the act called protection of acts done in good faith. In this section it is said that under the VAT Act civil and criminal cases or any other legal proceedings can not be filed or instituted against that officer if anyone is harmed due to an officer.
♣ 10 percent VAT on all services
Motor vehicle garages and workshops, dockyards, printing houses, auction houses, mechanical laundries, film studios, film exhibitors (theatres), film distributors, repair and servicing, security services, automatic or mechanical sawmills, sports organizers, transport contractors (except petroleum products), Attending board meetings, tailoring shops and tailors, building, floor and grounds cleaning or maintenance companies, lottery ticket sellers and social and sporting clubs.
♣Exemption of Industrial VAT
Export made garments
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