National Board of Revenue has taken a move to amend the now-suspended VAT and Supplementary Duty Act-2012 as a preparation for implementation of the law from July 2019.
VAT Online Project (VOP) of NBR on Wednesday sought from field-level offices proposals on the probable amendments to the law.
VAT offices have been asked to provide proposals with justifications to amend the act and its related rules — VAT and SD Rules-2016 —by October 17 to the VAT policy wing of NBR, said officials.
The new VAT law, mainly focusing on automation of VAT system including online returns submission, is scheduled to come into effect from the next fiscal year 2019-2020.
The new law was initially supposed to be implemented from the previous FY 2017-2018, replacing the existing VAT Act-1991.
But, the government deferred the implementation of the new law by two years following strong opposition from the business community over some provisions of the law, including introduction of uniform VAT rate at 15 per cent.
There are also concerns among various stakeholders including economists, consumers and traders that the introduction of 15 per cent single VAT rate would raise cost of living and business.
VAT officials on various occasions have also raised questions about some issues including rebate, registration, penalty and office management system under the new law.
Many of them are also advocating for continuation of VAT automation under the existing VAT Act-1991.
VOP in a letter to the field offices said that NBR chairman Md Mosharraf Hossain Bhuiyan had also made an instruction on the issue saying that it was an urgent task to bring the amendments for implementation of the law.
NBR will evaluate the amendment proposals, said the letter, signed by VOP deputy project director Syed Mushfequr Rahman.
An evaluation meeting will be held on October 18 at NBR conference room with NBR chairman in the chair where all members and commissioners of VAT and customs, and other senior officials of VAT wing will attend, it said.
Officials said that the law would require amendments to address business community’s demands including introduction of multiple VAT rates and hike in VAT-free annual turnover limit and upper limit of annual transactions for imposing turnover VAT.
The government has already in principle agreed to scrap single 15 per cent VAT rate and introduce more than one VAT rates and increase the VAT free turnover limit.
VAT officials also identified some problems and weaknesses of the new law which should also be addressed before the implementation move, they said.
For example, the new law has a provision to allow traders to receive VAT rebate for purchase of land and building, which is not consistent with the spirit of VAT system, a senior NBR official told New Age last week.
As per the new law, there will be no activities of field-level VAT offices like division and circle as everything will be done at commissionerate office, he pointed out, raising questions about the fate of the offices and their manpower.
There are also problems related to central VAT registration and unit registration of group of companies, he added.
NBR is implementing the VOP to automate VAT system under the law with a cost of Tk 556 crore.
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