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Presented By :
Snehasish Barua, FCA
Date: 15 June 2016
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The presentation has been prepared on the basis of publicly available sources i.e, NBR website, Finance Bill etc., in respect to changes proposed by the Finance Bill 2016. This presentation provides an overview of the changes proposed in the Finance Bill 2016. As provisions may be amended in the Finance Act 2016, this should not be used for reference as its substitute. The information contained in this presentation is of a general nature and is not intended to address the circumstances of any particular individual. Although we aim to provide accurate and timely information, we can not provide assurance that such information is accurate as of the date it is received or that it will continue to be accurate in future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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A. Year-wise NBR Budget B. Corporate tax C. Personal tax D. VAT & SD E. Custom Duty
Table of contents
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Source: The Daily Star, 3 June 2016
Budget at a glance
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National Budget Comparison at a glance
Particulars FY 2016-17 (Amount in Crore Taka)
FY 2015-16 (O) (Amount in Crore Taka)
Changes
Total Size of Budget 340,605 295,100 15.42%
Total Revenue Earnings 242,752 208,443 16.45%
Earning from NBR 203,152 176,370 15.18%
Budget Deficit 97,853 86,657 12.91%
GDP Growth 7.2%
Inflation 5.8%
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National Budget Comparison at a glance
Source of receipts 2016-17 2015-16 (R)
Tax 71,940 35.41% 51,796 34.53%
VAT 72,764 35.82% 53,913 35.94%
Import Duty 22,450 11.05% 17,119 11.41%
Export Duty 44 0.02% 34 0.02%
Excise Duty 4,449 2.19% 1,033 0.69%
SD 30,075 14.80% 25,064 16.71%
Other taxes and duty 1,428 0.70% 1,040 0.69%
203,150 100% 150,000 100%
35.43% growth
projected?
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an independent correspondent member of
Year-wise NBR Budget
59,742
76,225
91,595 103,332
125,000
149,720
176,370
203,152
-
50,000
100,000
150,000
200,000
250,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
NBR BUDGET (IN CRORE TAKA)
Revised to
150,000
Collected 70%
in 9 months
Collected
136,724
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an independent correspondent member of
Changes proposed for Corporate Tax
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Corporate tax rates
No major changes proposed in corporate tax rates except for the RMG companies. Rate has been proposed as 20% as compared to 35% for the assessment year 2015-16
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Now definition of income will also include: • Any income, receipts, profits or gains from whatever
source derived, chargeable to tax under any provision of ITO,1984
• Any amount which is subject to collection or deduction of tax at source
• Any amount on which a tax is imposed • Provision regarding bonus share withdrawn- aligned
with section 2(26) Trading receipts cannot be considered as income
Income: Redefined and created confusion
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an independent correspondent member of
Introduction of tax day
Type Date
Company 15th day of the seventh month following the end of the Income Year
Other than company
30th day of October following the end of income year
If the day mentioned above is a public holiday, the next day following the tax day
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an independent correspondent member of
Burden relieved for listed company and banks
Type Waiver proposed
Listed Company
A listed company will no longer be required to pay 5% additional tax for declaring dividend of less than 15% of its capital.
Banks A bank will no longer be required to pay 15% tax for showing profit in excess of 50% of its capital including reserves
Definition of income tax in section 2(62) still includes excess profit
tax/additional profit tax
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an independent correspondent member of
Real estate sector - change in tax rates
Building or apartment situated in the following areas
Residential purpose
(Tk.)
Non-residential
purpose (Tk.)
Dhaka south City Corporation; Dhaka North City Corporation; Chittagong south City Corporation; Chittagong North City Corporation
1,000 3,500
In any other city corporation 700 2,500
In any other area 300 1,200
The amount mentioned above will be 20% lower for residential apartment (including common space) not more than 70 square meters and 40% lower if the size is not more than 60 square meters.
Amount reduced substantially from last year but all areas of the Dhaka
and Ctg City corporation are not the same!
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an independent correspondent member of
Changes in section 30
• Withholding VAT requirement on any payment for the
purpose of inadmissible deductions has been removed
• Salary expenses will be disallowed if the employer fails to
obtain twelve digit TIN of the employee
• Excess perquisite limit has been proposed to TK. 475,000
from TK. 450,000. Will be increased Tk 2.5M for a person
with disability
• Foreign travelling expenditure threshold increased to 1.25%
from 1% of disclosed turnover.
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an independent correspondent member of
Penalty for non-compliance of exempted/reduced rate Co.
Exempted and reduced rate eligible company/person will:
• Have to pay tax @ corporate tax rate if the return is not
filed within the stipulated time.
• Have to pay tax @ corporate tax rate for any disallowance
of expenditure u/s 30
Increased harassment when
such an entity applies for time
extension
Does it cover all items from (a)
to (n)?
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an independent correspondent member of
TDS - Base amount
Base amount for TDS has been defined for the following
categories:
• Payment to contractors (section 52)
• Payment of royalties (section 52 A)
• Payment for certain service (section 52AA)
The base amount means the higher of the following and
inclusive of VAT:
• Contract value, or
• Bill or invoice amount, or
• Payment
Clear contradiction with section 49(2), BAS-18, other sections
under chapter VII How come VAT is revenue?
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an independent correspondent member of
TDS - Supply of goods and execution of contract
Tax is required to be deducted at a rate not exceeding 10%
(50% higher rate if no E-TIN) from the payment to a resident
on account of execution of contract, supply of goods,
manufacture, process/conversion, printing and
packaging/binding. The deduction is made on the basis of
base amount.
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TDS - Supply of goods and execution of contract
Threshold Level of payment (Tk.)
Current Rate of tax deduction
Threshold Level of Base amount
(Tk.)
Proposed Rate of tax deduction
Remarks
Up to 2 lakh Nil
Above 2 lakh to 5 lakh
1% Up to 20 lakh 3%
However, tax deduction at such prescribed rate shall not exceed 10% of the base amount
Above 5 lakh to 15 lakh
2.5% Above 20 lakh to 1 crore
4%
Above 15 lakh to 25 lakh
3.5% Above 1 crore to 5 crore
5%
Above 25 lakh to 3 crore
4% Above 5 crore to 10 crore
6%
Above 3 crore 5% Above 10 crore 7%
Source: The Financial Express
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Section 52A - Redefined
Current area of WHT Proposed area of WHT
Payment to any doctor Royalty payment Fees for professional and technical services
Royalties, franchise, or the fee for using license, brand name, patent, invention, formula, process, method, design, pattern, know-how, copyright, trademark, trade name, literary or musical or artistic composition, survey, study, forecast, estimate, customer list or any other intangibles
Current rate of tax deduction
Proposed rate of tax deduction (slab rate)
10% - ETIN 15%- No ETIN
Up to 25 lac of base amount 10% (50% higher if no ETIN)
Above 25 lac of base amount 12% (50% higher if no ETIN)
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an independent correspondent member of
SL.
No
Description of payment Current Rate of deduction
Proposed rate of deduction on base amount
Up to 25 lac Above 25 Lac
1. Advisory or consultancy service (from 52A) 10/15% 10% 12%
2.
Professional service, technical services
fee, or technical assistance fee (from 52A)
10/15% 10% 12%
3. Catering service 10% 10% 12%
4. Cleaning service
(a) commission
(b) gross receipts
10% 1.5%
10% 1.5%
12% 2%
5. Collection and recovery agency
(a) commission
(b) gross receipts
10% 1.5%
10% 1.5%
12% 2%
Section 52AA - Slab rates
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SL.
No
Description of payment Current Rate of deduction
Proposed rate of deduction on base amount
Up to 25 lac Above 25 Lac
6. Management of event, training and workshop- (a) commission (b) gross receipts
10% 1.5%
10% 1.5%
12% 2%
7. Private security service provider- (a) commission (b) gross receipts
10% 1.5%
10% 1.5%
12% 2%
8. Supply of manpower- (a) commission (b) gross receipts
10% 1.5%
10% 1.5%
12% 2%
9. Indenting commission 7.5% 6% 8%
Section 52AA- Slab rates
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an independent correspondent member of
SL.
No
Description of payment Current Rate of deduction
Proposed rate of deduction on base amount
Up to 25 lac Above 25 Lac
10. Meeting fees, training fees or
honorarium
10% 10% 12%
11. Mobile network operator,
technical support service provider
or service delivery agents
engaged in mobile banking
operations
10% 10% 12%
12. Credit rating agency 10% 10% 12%
13. Motor garage or workshop 5% 6% 8%
14. Private container port or dock yard service
5% 6% 8%
Section 52AA - Slab rates
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an independent correspondent member of
SL.
No
Description of payment Current Rate of deduction
Proposed rate of deduction on base amount
Up to 25 lac Above 25 Lac
15. Shipping agency commission 5% 6% 8%
16. Stevedoring/berth operation commission 10% 10% 12%
17. Transport service, car rental 3% 3% 4%
18. Any other service which is not mentioned in
Chapter VII of this Ordinance and is not a
service provided by any bank, insurance
or financial institutions
10% 10% 12%
Section 52AA - Slab rates
Two added and three of them delisted
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TDS - Export of goods
Tax is required to be collected by banks @1.5% from 0.60% on export
proceeds received on account of exports of knit wear and woven
garments, terry towel, carton and accessories of garments industry jute
goods, frozen food, vegetable, leather goods, packed food.
Tax is required to be collected by banks @ 1.5% from 0.60% on export
proceeds received on account of exports of any goods except knit wear
and woven garments, terry towel, carton and accessories of garments
industry jute goods, frozen food, vegetable, leather goods, packed food.
Changed from 0.8% to 0.6% in 2015
Increased by 150%?
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Collection of tax from travel agent
In addition to the existing provision of tax collection (0.3% to
be collected on commission or discount or any other benefits),
tax is required to be deducted at the rate 0.3% on payment of
incentive bonus, performance bonus or any other benefits
from sale of ticket bill of carrying cargo by air. Calculation will
be as follows:
(A/B)xC where:
A = Incentive bonus/performance bonus or any other benefit
B = Is the amount of commission or discount
C = 0.30% (source tax)
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an independent correspondent member of
TDS – Commission, Discount, fees, etc.
Tax is to be collected by a company on sale of goods to any
distributor or any other person under a contract other than oil
marketing company in the following manner:
5% on the amount equal to B x C where,
B = Selling price of the company to a distributor or any other person
C = 12%
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an independent correspondent member of
Comparison with the current scenario:
TDS – Commission Discount, fees, etc.
Current scenario BDT Proposed scenario BDT
Sales price to distributor
1,500,000 Sales price to distributor (B)
1,500,000
Retail price fixed by the company
1,550,000 Deemed sales percentage (C)
12%
Differential amount 50,000 Deemed Income (B X C)
180,000
Source tax @ 3% 1,500 Source tax @ 5% 9,000
5 times
higher!
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an independent correspondent member of
SL. No
(*)
Particulars of payment Rate of deduction
Proposed Rate of deduction
1. Advisory or consultancy service 30% 20%
2. Pre-shipment inspection services 30% 20%
5. Certification, rating etc. 30% 20%
15. Contractor, sub-contractor or supplier 5% 7.5%
16. Supplier 0% 7.5%
17. Capital gain-listed security 10% 15%
26. Any payments against any services not
mentioned above
20%
Changes in TDS on payment to non-resident
* = in the sequence of the serial
Two items delisted, two
new items listed and
one of them segregated
into three items.
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Particulars Last year
Proposed rate
For security which is based on Islamic principles. (51) 5%
Tax to be deducted/collected by the local agent of a non-resident courier company on the amount of service charge accrued from the shipment of goods, documents, parcels, or any other things outside Bangladesh. [56(12)]
15% 15%
Any person responsible for collecting Value Added Tax (VAT) in accordance with VAT Act, 1991 from cigarette manufacturers shall collect tax at the rate of three per cent (3%) of Maximum Retail Price (MRP) of such cigarette at the time of collection of such VAT- (52B)(2).
3% Nil
International gateway service operator 1% 1.5%
ICX (Interconnection Exchange) and ANX (Access network) 5% 7.5%
Interest on saving instrument (52D) and saving and fixed deposit (53F) of Funds
5%
Other changes in TDS
Funds are now taxable
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TDS Return- timeframe and audit
Withholding tax return u/s 75A shall be submitted by
following dates:
a) First return: by 31 January and
b) Second return: by 31 July
DCT shall select the withholding tax return for audit within 4
years from the end of the year in which the return was filed
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Tax on motor car
CC of the Vehicle (Motor car or Jeep)
BDT
Up to 1500 CC 15,000 Such advance tax is not refundable. And the amount will be 50% higher for each additional motor car if the owner has two or more motor cars in his name or in joint names.
Up to 2000 CC 30,000
Up to 2500 CC 50,000
Up to 3000 CC 75,000
Up to 3500 CC 100,000
Above 3500 CC 125,000
Each Microbus 20,000
Authority responsible for the registration and fitness renewal of motor car shall collect advance tax from the owner of the private motor car at the following rate:
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82C – Minimum tax
Sources of income have been divided into 3 broad categories for tax computation purpose considering the concept of minimum tax: a) Minimum tax for certain sources of income b) Final discharge of tax liability c) Tax on gross receipts (old 16CCC)
Loss arising from the sources of income except for those mentioned (a) and (b), can be carried forward as per provisions of ITO 1984.
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82C – Minimum tax for certain sources of income
• Tax deducted or collected under sections 52, 52A, 52AAA, 52B, 52C, 52D, 52JJ, 52N, 52O, 52R, 53, 53AA, 53B, 53BB, 53BBB, 53BBBB, 53C, 53CCC, 53DDD, 53EE, 53F, 53FF, 53G, 53GG, 53H, 53M, 53N and 55 shall be considered as minimum tax.
• Tax from such sources shall be calculated by using regular rate of such
income and if the tax so calculated is higher than the minimum tax, then higher amount will be payable on such income.
• And loss derived from such sources can not be set off with other sources
and vice versa
How are we going to get the tax base?
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82C – Final discharge of tax liability
Withholding tax deducted from the following sources of income will be considered as final tax liability considering the rate of withholding tax would be their applicable tax rate:
Sl no.
Section Amount that will be taken as
income
Rate or amount of tax
(1) (2) (3) (4)
1 Section 52C amount of compensation as
mentioned in section 52C
as mentioned in section 52C
2 Section 52D amount of interest as mentioned
in section 52D
as mentioned in section 52D
3 Section 53DDD amount of export cash subsidy as
mentioned in section 53DDD
as mentioned in section 53DDD
4 Section 53F(1) (c) and (2)
amount of interest as mentioned
in section 52D
as mentioned in section 53F
5 Section 53H Deed value as mentioned in
section 53H
as mentioned in section 53H and the rule made thereunder
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82C – Tax on gross receipts
For any other sources of income except those mentioned in (a) and (b) above, income would be determined following the provisions of ITO 1984. However, tax liability so determined should not be less than the amount of minimum tax as mentioned below:
• Manufacturer of cigarette, bidi, chewing tobacco or any tobacco products
• Mobile phone operator company • Any other cases
1%
0.75% 0.6%
The rate will be 0.1% for new industrial undertakings engaged in manufacturing of goods for first 3 income years since commencement of commercial production.
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82C – In case of mix of income
Where the assessee has an income from any source that is exempted from tax or is subject to a reduced tax rate, the gross receipts from such source or sources shall be shown separately, and the minimum tax under this sub-section shall be calculated in the following manner- (A/B) X C A= amount of tax under the reduced rate or under the tax benefit that the source or person enjoys, B = amount of regular tax if there were no such exemption or reduced rate, C= rate of minimum tax as mentioned in earlier clause;
Does it mean exempted company will have to pay
minimum tax?
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an independent correspondent member of
Changes in exempted income
a) Any payment from WPPF up to Tk 50,000 received by a beneficiary (earlier it was fully exempted income for all workers not all beneficiaries).
b) E-commerce and on line shopping are now excluded from ITES definition. Digital archiving and physical records are included in ITES definition.
c) Income up to Tk 500,000 received by an assessee from Pensioners’ savings certificate (earlier income from wage earners bond was also tax exempt).
a) Income derived from SME up to Tk 3.6 million are exempt (earlier 3
Million)
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Penalty - Shortfall of advance tax
Simple interest: Simple interest @ 10% will be 50% higher if the return is not filed on or before the “Tax day” Period of simple interest imposition: the period will be the shorter of: a. From first day of July, following the end of the income year
in which advance tax was applicable, up to the date of regular assessment; or
b. a period of two years from the said first day of July
Does it not make Section 65 redundant?
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Penalty – Delay in filing return
Failure to file return on or before the expiry of “Tax day”: Delay interest will be imposed @ 2% per month on the difference between the tax assessed on total income for the assessment year and tax paid in advance along with tax deducted or collected at source. Period of delay interest: the period will start from the first day immediately following the Tax day to:
a. The date of filing return where return is filed b. The date of regular assessment where return is not filed
The period shall not exceed one year
Will section 124 be applicable?
No interest for whom proviso 7(2)(c) applies instead of 75(6)?
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Other major changes in corporate tax
• Chief executive officer has been included under the definition of “Principal officer” under section 2(48).
• Any other license fee paid by any other company engaged in providing specialized services if such license is integral to the operation of the company will be eligible to be amortized as per 3rd schedule
• Tax will include now delay interest and additional interest.
• Non-payment of tax under section 74 shall cause the application to ADR to lose its eligibility
• In addition to existing method of filling of appeal, assessee can file appeal
electronically or in any other machine readable or computer readable media.
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Proposed tax rebate structure
Threshold level Amount of credit (%) on eligible amount
Up to TK. 10 lacs 15%
More than TK. 10 lac up to TK. 30 lac
(i) First Tk. 2 lac 15%
(ii) On the rest 12%
More than Tk. 30 lacs (i) First up to Tk. 2 lac 15%
(ii) Next Tk. 4 lac 12%
(iii) On the rest 10%
Reduction in investment tax credit
Eligible amount is the lesser of the following: a) Actual investment; or b) 20% of total income (previously it was 30% of total income); or c) Tk. 1.5 Crore
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Scenario-1 (Income up to 10 lac)
Comparison with current rebate structure
When Total income is Tk. 900,000 AY 2015-16 AY 2016-17 (Proposed)
(i) Actual investment 270,000 (i) Actual investment 180,000
(ii) 30% of total income 270,000 (ii) 20% of total income
180,000
(iii) 15,000,000 (iii) 15,000,000
Tax rebate (15% * 270,000)
40,500 Tax rebate (15% * 200,000)
27,000
Investment discouraged and tax burden is slightly increased!
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Scenario-2 (Income above 10 lac to 30 lac)
When Total income is Tk. 2,500,000 AY 2015-16 AY 2016-17 (Proposed)
(i) Actual investment 750,000 (i) Actual investment 500,000
(ii) 30% of total income 750,000 (ii) 20% of total income 500,000
(iii) 15,000,000 (iii) 15,000,000
Tax rebate (15% * 750,000)
112,500 Tax rebate: First (200,000 * 15%)
30,000
On the balance (300,000 * 12% ) 36,000
Total rebate 66,000
Investment discouraged and tax burden increased!
Comparison with current rebate structure
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Scenario-3 (Income above 30 lac)
When Total income is Tk. 4,500,000 AY 2015-16 AY 2016-17 (Proposed)
(i) Actual investment 1,350,000 (i) Actual investment 900,000
(ii) 30% of total income 1,350,000 (ii) 20% of total income 900,000
(iii) 15,000,000 (iii) 15,000,000
Tax rebate (15% * 1,350,000)
202,500 Tax rebate: First (200,000 * 15%)
30,000
Next (400,000 * 12% ) 48,000
On the balance (300,000 * 10%) 30,000
Total rebate 108,000
Investment discouraged and tax burden increased!
Comparison with current rebate structure
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Surcharge on individual assessee Current Net worth Value Current rate Proposed Net worth
Value Proposed rate
Up to Tk. 2.25 Crore Nil Up to Tk. 2.25 Crore Nil
More than Tk. 2.25 crore up to Tk. 10 crore
10% More than Tk. 2.25 crore up to Tk. 5 crore
10%
More than Tk. 10 crore up to Tk. 20 crore
15% More than Tk. 5 crore up to Tk. 10 crore
15%
More than Tk. 20 crore up to Tk. 30 crore
20% More than Tk. 10 crore up to Tk. 15 crore
20%
More than Tk. 30 crore 25% More than Tk. 15 crore up to Tk. 20 crore
25%
More than Tk. 20 crore 30%
Minimum surcharge BDT 3,000 Do
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Other Major changes in personal tax
Every person, being an individual assessee, shall furnish statements of the total assets and liabilities if the person: has, in the last date of the income year, a gross wealth exceeding
taka twenty lakh; or owns a motor car; or has made an investment in a house property or an apartment in the
city corporation area
An individual not being a shareholder director of a company may opt not to submit statement of his life style if his total income does not exceeds three lac taka in the income year.
In case of parent/legal guardian of a physically challenged person, he/she will get a further initial exemption of Tk. 25,000 in addition to the prescribed limit
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Changes in VAT & SD
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VAT Rebate
In section 9 of the VAT Act there was an arbitrary word “etc.” which has been proposed to be deleted. Therefore, this proposed regulation has been made more precise and now the negative list will include VAT paid on construction, balancing, modernization, replacement, expansion, renovation and repair of any building or structure or establishment, purchase and repair of all kinds of furniture, stationery, air conditioner, fan, lighting equipment, generator, architectural plan and design, vehicle rent or lease .
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VAT Rebate
• The concerned VAT officer may issue letter to show cause to the concerned person who has taken input VAT credit illegally.
• The concerned person will be given an opportunity for necessary hearing before adjustment of input VAT credit which was illegally taken earlier.
• The concerned VAT Official is required to dispose of the order within 30 working days (LY: 15) of receiving the written grounds of appeal after giving the appellant an opportunity of being heard.
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ADR
• Disputes or cases relating to the allegation of the evasion of Value Added Tax or Supplementary Duty by untrue declaration or furnishing of false information or documents and disputes relating to such important legal matters will remain within the purview of the alternative dispute resolution process under this Act. This matters and disputes were not earlier considered for ADR.
• Application under Section 41(Uma) of VAT Act, the 1991 is required to be filed within 20 working days (LY: 10 days) from the issue date of notice against which application will be submitted.
• Negotiation and disposal in case of application filed for the process of ADR when the case remain pending with the concerned (Appeal), Appellate Tribunal or in any other court under section 41(cha) of the VAT Act, 1991 will have to be disposed off within 50 working days (LY: 60 days) of the filing of the application.
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Appeal – burdensome disputed VAT
At the time of filing an appeal, the appellant shall have to pay certain amount as prescribed in the section. The payment of certain amount for filing appeal has been increased in the following ways:
Appeal to Amount to be deposited
Commissioner (Appeal 50% of the tax demanded or where there is no tax demanded, 50% of the monetary fine charged (LY: 10%)
Appellate Tribunal
Huge!
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Price Declaration
Divisional officer is now not required to give their decision (within 15 days) with regard to price declaration or revised declaration by any registered person who is engaged in supplying taxable goods or services along with VAT exempted goods or services or export of goods or services [Rule 3(1a)] A registered VAT payer engaged in supplying taxable goods or services along with VAT exempted goods or services or export of goods or services is required to submit revised price declaration through VAT-1 (Ga) before seven working days. Divisional officer is now not required to approve the price declaration rather report anomalies, if any, comes to their knowledge to the Commissioner.
Relieving hassle!
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Price Declaration
• “Approved value” will not be considered for investigation or survey of price declaration of a particular goods by Divisional Officer, Circle Revenue Officer or any other Value Added Officer. Now, investigation or survey will be carried out based on the amount of value addition and division of similar goods, actual cost, value declared or information related to market value, maintained at the Circle, Division or Commissioner’s office.
• During the investigation or survey of price declaration, if any deviation or
inconsistency is found, the Divisional Officer is not now required to determine the revised price rather need to inform the Concerned Commissioner to take action in accordance with Sub-rule 7 of Rule 3 of the VAT Rules, 1991.
Now appeal need to file directly to the Tribunal
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Price Declaration
In case of sale of goods with discount
As per new changes in rule 3(6), there is no limit for offering discount of any
goods. Earlier, the maximum discount was 15% which could be valid only for 30
days in 12 months period. Currently, price of goods can be discounted at any
rate at any time.
Business friendly!
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Mandatory Registration
The coverage of mandatory registration under Section 15 of the VAT Act, 1991 to pay VAT has been extended through the amendment of SRO 183- AIN/2012/641-Mushak dated 07 June 2012 by issuing a new SRO Ref: 185-AIN/2016/761- Mushak dated 2 June 2016. According to the amendment, all manufacturers of taxable goods whose place of business are in Dhaka North City Corporation, Dhaka South City Corporation and Chittagong City Corporation are required to be registered under Section 15 of the VAT Act, 1991 irrespective of its annual turnover.
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Online Sales - Redefined
Product sales through online means sales and purchases of any goods and services using electronic network which was earlier received from a manufacturer or service provider with payment of VAT and online seller does not own any sales centre. The changes are: • Product sales through online without any selling centre. • Payment through electronic network is not mandatory. • Product or service will be received from manufacturer or service provider
with payment of VAT
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HS Code Details Stage Action
1701.12.00 Beet sugar Import Exclusion
from
exemption
list
1701.13.00 Cane sugar specified in note 2 Import
1701.14.00 Other cane sugar Import
1701.91.00 Sugar containing added
flavoring and coloring matter Import
72.07 Bilat Import
19.05.10.00 & 19.05.20.00
Bread and other types of bread
Production
44.11 Hardboard Production
64.02 Plastic sandal Production
VAT Exemption
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HS Code Details Stage Action
85.02 Electrical generator Production Exclusion
from
exemption
list
S007.00 Classified advertisement Service
S016.00 Travel agency Service
S060.00
Rubber purchase through
bidding for industrial
organization
Service
S099.40 Meditation service Service
S099.50 Online sales Service
VAT Exemption
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VAT Exemption
HS Code Details Stage Action
7201.10.00
Non alloy pig iron containing
weight .5 % or less of
phosphorus
Import
Inclusion in
exemption
list
7201.20.00
Non alloy pig iron containing
weight more than .5 %
phosphorus
Import
7201.50.00 Alloy pig iron; spiegeleisen Import
8523.29.12
&
8523.49.20
Software Import &
production
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Reference Details
S070.10 Private University
S070.20 Private Medical & Engineering College
S099.2 Other service: Service related to dyeing, printing, finishing,
and calendaring of Grey Fabrics
2nd Schedule Ambulance carrying patient and dead body
VAT Exemption
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Change of truncated rate
Service code Details Current
rate Proposed
rate
S 003.10 Motor Vehicle garage and workshop 7.5% 10%
S 003.20 Dockyard 7.5% 10%
S 004.00 Construction Firms 5.5% 6%
S 070.10 (i)Transport Contractors: of petroleum products. (ii)Transport Contractors: others
(i) 2.25% (ii) 7.5%
(i) 4.5% (ii) 10%
S010.20
Building Construction Firms 1. Up to 1 to1100 sq-ft 10% 2. Up to 1101-1600 sq-ft 16.6% 3. From 1601 sq-ft 30%
3%
1. 1.5% 2. 2.5% 3. 4.5%
S 078.00 Sale center of own brand garments/clothes
5% 4%
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Service code Details Current rate Proposed rate
S 067.00 Immigration advisor 7.5% 15%
S 074.00 Rent of place 9% 15% S 099.30 Sponsorship services 7.5% 15%
Truncated rate to standard rate
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Major Changes in tariff value
Heading No
Details Proposed Price Last Year
48.04
Liner paper
BDT 26,250/MT BDT 21,000/MT
White liner paper BDT 27,500/MT BDT 22,000/MT Craft liner paper BDT 30,000/MT BDT 24,000/MT
48.05 Medium paper BDT 20,000/MT BDT 16,000/MT 48.09 Self copy paper BDT 30,000/MT BDT 24,000/M 48.10 Duplex board/ quoted paper BDT 28,750/MT BDT 23,000/MT 48.13 Cigarette/ Bidi paper BDT 43,750/MT BDT 35,000/MT
48.18
Kitchen towel (24-26 gsm) BDT 68,750/MT BDT 55,000/MT Toilet tissue (18-24 gsm) BDT 71,250/MT BDT 57,000/MT Napkin tissue (20-24 gsm) BDT 75,000/MT BDT 60,000/MT Facial tissue (12-16 gsm) BDT 81,250/MT BDT 65,000/MT
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Major Changes in tariff value
Heading No
Details Proposed (Tk/MT)
Last Year (Tk/MT)
72.04 Scrap/Ship scrap 2,000 1,800 72.09 HR coil-CR coil 8,000 7,500
72.10 72.12
CR coil to GP sheet 6,500 6,000 CR coil to CI sheet 7,000 6,375 HR coil to GP sheet 15,000 13,500 CR coil to CI sheet color 7,200 0 HR coil to CI sheet 15,500 13,875 HR coil to CI sheet color 16,000 0
72.13 to 72.16
MS good produced from imported/collected reroll able scraped
3,500 3,300
Billet & ingot good produced from imported/collected reroll able scraped
3,000 2,750
72.13 to 72.16
MS good produced from Billet or ingot 3,000 2,750 Ingot or billet produced from Gorda/malt able & MS product produced from ingot or billet
6,000 5,500
72.17 GI wire 12,000 11,000
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General Change
Any organisation having more than one associate under common
ownership located nearby and keeps all records together can be registered under single registration
Indenting agency and Credit rating agency are add in to the list of Compulsory VAT deduction at source service
Advertising firm has been excluded from the list of Compulsory VAT deduction at source service.
100% increase in package VAT
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HS code Details Proposed
rate
1901.90.91 Malt extract/food preparations imported in bulk by VAT registered food processing industries
20%
2106.90.49 Other stabilizer for milk 10%
2106.90.50 Coffee mate in bulk imported by VAT registered milk food stuffs manufacturer
20%
2516.90.10 Bolder stone 10%
2917.32.10 Pharmaceutical grade imported under block list by VAT registered pharmaceutical industries
20%
Changes in SD
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HS code Details Proposed
rate
72.13 Bars and rods, hot rolled, in irregularly wound coils, of iron or non-alloy steel
45%
72.14
Other bars and rods of iron or non-alloy steel, not further worked than forged, hot rolled, hot drawn or hot extruded, but including those twisted after rolling
45%
72.15 Other bars and rods of iron or non-alloy steel of free cutting steel, not further worked than cold-formed or cold-finished
45%
72.16 Angles, shapes and sections of iron or non-alloy steel
20%
Changes in SD
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HS/S code Details Proposed rate
8536.61.00 Lamp-holders 10%
8536.70.00 Connectors for optical fibers, optical fibers bundle or cables
10%
8536.61.00 Other apparatus 10%
S038.00 Foreign artist 10%
Changes in SD
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HS code Details Proposed
rate Current
rate
2402.90.00 Handmade/manual process biri or others
150% 100%
24.03 Others produced tobacco and similar material; Tobacco's homogenized or reconstituted extract or perfumed
150% 100%
25.17
Pebbles , gravel, broken or crushed stone (excl. imported by VAT registered ceramic products manufacturing industries)
30% 20%
29.17 Dieoctile orthophthalates (DOP) 10% 20%
48.13 Cigarette paper 100% 60%
Changes in Supplementary Duty
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Changes in Supplementary Duty
H/HS code Details Proposed
rate Current
Rate
8415.90.91 Imported by VAT registered air condition manufacturer
60% 45%
8529.90.31 Loaded printed board (including under head 85.27,85.28) imported by VAT registered TV manufacturer
150% 100%
9404.40.00 Playing cards 10% 20%
S012.20 Service used by mobile phone through SIM/RIM card
5% 3%
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Major Changes in CD
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Major Changes
A new slab of 15% has been introduced in Custom Duty. Now the slabs would be 0,1, 5, 10, 15, 25
Regulatory duty reduced to 3% from 4%
Special procedure and management system have been formulated in order to prevent misuse of the duty concessions given to the importation of the industrial raw materials
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Agriculture Sector
Custom duty on imported rice has been increased to 25% from 10% Import duties on rapeseed cake/soya cake have been increased to
10% from 5% Import duties have been reduced to 1% on some selected parts which
are used for machineries of agricultural use
Export Oriented Industries
All export oriented industries will get same benefit as garments industries during importation of fire equipment
Garments industries will get capital goods benefit to cutting table
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Construction Sector
Duties and taxes have been enhanced or tariff value has been imposed on boulder, crushed stone, ferro alloy, billet, bar & rod, angle, fly ash
On some of the inputs rate has been reduced to 15% which are used for local manufacturing of fire equipment and doors
Chemical Sector
Duty tax is reduced for: petroleum jelly, paraffin wax, raw rubber, rubber process oil, glossy starch, gum resin.
Duty tax is increased on: talc powder, ECG and ultra sound paper, filter blocks made of pulp etc.
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Electrical Sector
Prominent inputs on which duty is reduced are: urea resin, DOP, adhesive tape in rolls, fiber glass, inputs and parts of compressor
Duty increased on lamp holder, cable connector and busbar trunking system
Textile Sector
Duty on stripping chemical is reduced to 15% from 25% Duty on flax fiber and spandex/elastraometrics is reduced to 5%
from 10% Custom duty is increased to 5% from 3% applicable to the chemicals
and other inputs or raw materials
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Transport Sector
Motorcycle: Existing 45% SD is reduced to 20% on some conditions Rebate facility is provided for human hauler subject to some conditions
Gas and Power Sector
Existing facilities for the capital good will be continued in the coming fiscal year
Custom assessment for concessionary or reduced rate will be allowed for input of stove, biogas plant, air tight storage bag with zipper, biogas digester, cylinder made of plastic and glass fiber
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IT Sector
Existing duty exemptions will continue in the next fiscal year Duty is reduced for inputs of the manufacturer of SIM cards, scratch cards,
credit cards, and other smart cards
Pharmaceutical Sector
Capital goods benefit will provided for special type refrigerator, laboratory stability/humidity chamber
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Other changes
Custom duty is reduced to 15% from 25% on lubricant used in the industries
Custom duty of alu/alu bottom foil is reduced to 15% Custom duty of children picture, coloring books is increased to 10% from
5% Custom duty on rides (amusement industries) above 10% has been
exempted on certain conditions Custom duty will be imposed at the rate of 1% on the goods imported by
referral hospitals for its establishment and development
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Recommendation
Revisiting section 82CC with respect to decreasing minimum tax from 0.6% to 0.3-.04%
Decreasing deemed margin to 3-5% instead of 12% and changing the rate to 3% from 5%
Excluding ‘VAT inclusive price’ from the definition of base amount for TDS Reducing source tax in 53BB and 53BBB from 1.5% to 0.8% to promote
export and target of reaching 50B in 2021. Liberalizing the changes proposed for investment tax credit Updating the reference in section 73A (2) with regard to time extension. Disputed VAT deposit to be reduced to 10% from 50% Clarifying whether a tax exempt company need to pay minimum tax u/s 82c Clarifying whether all provision of section 30 will be applicable for a tax
exempt company Not to impose tax on Funds ( reinstating earlier provision)
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No part of this presentation may be reproduced, stored in a retrieval system or transmitted in any form by any means- electronic, mechanical, photocopying, recording or otherwise- without prior permission from the presenter. This presentation is intended to provide information, but is not a substitute of legal or accounting advice.
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Questions
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Contact Details
Snehasish Barua, FCA (ICAB), ACA (ICAEW)
Partner
Snehasish Mahmud & Co
Chartered Accountants
+8801819319319
www.smac-bd.com