Principles
of
Taxation
• 2 Scenario _16 marks
• VAT _10 or 35 marks
• Customs Act _10 or 25 marks
• Other heads_15 marks
Vat Act
Reference book:
ICAB Manual Enough (important topic)
Ashraf Hossain vai (video)
Abdur rauf sir (video+book)
Important topic-ICAB Question
Value added tax Act 1991
ValueAdded Tax Rules 1991-(Finance Acts and various rules, regulations and
notifications issued under this Act).
Supplementary Duty Act, 2012
(hereinafter referred to as the VAT and SD Act) (Act No. 47 of 2012) has already
been enacted on 10 December 2012.
NBR issued Value Added Tax
and Supplementary Duty Rules 2016 (3 nov-2016)
Person liable to pay VAT
VAT Registration & Turnover Tax Enlistment ( 3 core-12 month)
VAT registration by non-resident (vat agent-he carry)
Mandaory registration (Table 1, 2 & 3)
Table-1 Manufacturer of goods
Table-2 Service provider
Unit central registration (SRO No. 263-Ain/2019/79-Mushak dated 18 August
2019)
-Mushak 2.1-vat registration -Document
(b) Partnership deed/ MOA, AOA/ Relevant ownership certificate.
(c) TIN Certificate (if any);
(d) IRC/ERC Certificate (if any);
(e) Incorporation certificate.
(f) List of all related selling centers in the case of “central registration”;
(g) List of all input along with HS code;
(h) BIDA Permission/registration certificate (for manufacturer);
(i) Passport and e-TIN of shareholders.
(j) Bank Solvency Certificate
Mushak 2.1-vat registration -Document
Mushak-2.3” containing a business identification number.
Mushak 4.3 Input-output co-efficient
Mushak-6.3 Tax invoice supply goods
Mushak-9.1 VAT return 9.1
Mushak 3.1 Vat agent
Mushak 6.1 Purchase register or 6.2.1
Mushak 6.2 sales
Mushak 6.6
Mushak 6.7 Credit note
Mushak 6.8 Debit note
Mushak 6.9
Zero rate?
Output tax- 1.5%, 2%, 2.4%, 4.5%, 5%, 7.5%, or 10% or Fixed amount
or Input tax
Five lyer of VAT_ Importer, producer, wholesaler, Retailer, Consumer
Turnover tax and limit also percentage 50 lac- 3 crore and 4% annual
Supplementary duty- luxury goods, not essentials and socially unwanted goods
or services.
Cancellation of VAT Registration: Mushak-2.4 ( fails or annual turnover below-2
consecutive year)
Cancellation of Turnover Tax Enlistment:
Informing changes in registration/enlistment: (2.1-2.4 Mushak)
VAT Rate
Reduce tax rate schedule-3rd schedule
Registered person rebate or not? Goods or services exported, then rebate?
Decrease adjustment? Vat return?
1st schedule: VAT exemption
2nd: Second Schedule to the VAT Act (Section 55 of the VAT and SD Act).
VAT exemption
Table-1, Goods at both import and manufacturing stage (cement)
Table-2, Goods at Trading stage
Table-3, services stage (credit rating agency 7.5%)
Table-4 and goods at trading stage listed in
Table-5 and at Manufacturing and Trading stage for goods of SRO No. 128-
Ain/2020/79/Customs dated 03 June 2020 for entity enjoying concessionary
benefit subject to conditions.
Manner of VAT Collection
CD+RD+SD+AT+AIT (507 page must be)
Advance tax
Condition of Refund of AT: Mushak 4.1 120 days paid(15 days verification-
receipts application issues transfer approve money)
Any import stage on goods 1st schedule
Value of the Taxable supply (must be read)
50000*15/115 =6522 =50000-6522 =43478
Statutory definition: Section
Advance tax?
Resident?
Input-Output Tax?
Withholding entity?
Import service or import stage?
Tax-invoice-assessment-fraction-period
Taxable import-supply
Credit note-decrease adjustment- any mushok or subnote in return?
Debit note-increase adjustment-any mushok or subnote in return?
-WHT
-Annual re-calculation
-if not made banking channel
-privet use
-less paid earlier tax period
Enlistment threshold- 50 lakh turnover economic activity of any person or 12
month?
Registration threshold- 3 crore, 12 months does not include following namely?
Deemed export
Representive
Bin?
Witholding tax deduction certificate?
Decreasing adjustment"?
Declaration of Input-Output Coefficient-Mushak 4.3
Net VAT = Output Tax – Input Tax (Credit) + Increasing Adjustment – Decreasing Adjustment
Case study: Net VAT calculation
New Bangla Private Ltd. (NBPL) is an enterprise registered with Dhaka North VAT
Commissionerate and engaged in shoe manufacturing. They imported raw materials from
Japan
paying VAT of Tk 300,000 and Advance Tax of Tk. 60,000.
They have purchased raw materials from ABC Ltd. For Tk 2,500,000
NBPL purchased another type of raw materials from a registered proprietorship firm MS
Hasan Traders (HT) having value of Tk 200,000 and payment is done through account payee
cheque.
AB Legal submitted an invoice of Tk 200,000 without issuing Form Mushak-6.3.
They sold goods with 100 invoices aggregating to Tk 7,000,000 to their customers. Out of 100
customers, 3 of them refunded some goods worth of Tk 300,000.
All these transactions took place in July 2024.
Calculate net VAT for this tax period.
Input tax credit:
Documents required for claiming Input tax credit
Partial Input Tax Credit
Withholding VAT
VAT deduction/collection at source
Goods/services that are exempted from VDS:
SD
