The National Board of Revenue has made obtaining business identification number (BIN) and payment of value-added tax mandatory for manufacturers of around 200 types of products ranging from dairy items to readymade garments and for service providers in 79 categories including restaurants and online sales of products, irrespective of their annual turnover.
Value-added tax wing of the NBR on Thursday issued a general order with retrospective effect from July 1, the date in which the new VAT and Supplementary Duty Act-2012 came into force.
Superstores and shopping malls across the country have also come under the mandatory VAT payment order.
In the new VAT law, the government exempted small-scale traders having annual turnover up to Tk 50 lakh from payment of VAT while set 4 per cent turnover VAT on annual turnover between Tk 50 lakh and Tk 3 crore.
Traders having annual turnover below Tk 50 lakh were also exempted from obtaining BINs while traders with annual turnover between Tk 50 lakh and Tk 3 crore were supposed to be enlisted as turnover VAT-payers.
Now with the issuance of the order, businesses from both categories irrespective of their annual turnover will have to take BINs, commonly known as VAT registration numbers, and will have to pay VAT at the rates applicable to the sectors.
The VAT rates for registered VAT-payers are 5 per cent, 7.5 per cent, 10 per cent and 15 per cent.
Officials said that the NBR made the provision mandatory for manufacturers and traders observing that most of the businesses were going out of VAT net by declaring their annual turnover less than the actual turnover to escape VAT.
Businesses that are eligible for VAT payment are trying to be registered as turnover VAT-payers while turnover VAT enlisted traders are trying to show their annual turnover below Tk 50 lakh to evade VAT, they said.
As per the NBR estimation, more than 51 per cent VAT registered and turnover enlisted businesses are set to go out of VAT net, they added.
The NBR has issued the order fearing huge revenue losses due to the tendency of traders, they said.
According to the order, manufacturers of more than 175 types of products with four-digit HS code will come under the order.
Manufacturers who will have to receive BINs and pay VAT irrespective of their annual turnover include manufacturers of dairy products, woollen fabrics, cotton yarn, cotton fabrics, synthetic fibre, knitted and crocheted fabrics and readymade garment, sugar confectionery like lozenge and chewing gum, chocolate, noodles and similar food products, biscuit, chanachur, jam, jelly, pickle, sauce, china clay, lime, marble stone, glycerin, melamine, all types of ceramics and porcelain products, glassware, antiseptic, disinfectant and medicine, and pigments, varnishes and polishes.
The products like ink, soap, detergent, match, mosquito coil, foam, PVC pipe, plastic goods, tyres, tubes, rubber products, leather goods, wood goods, particle board, insulation board, hard board, plywood, toilet paper, tissue paper, sanitary napkin, packaging material, starch, gum, glucose/dextrose, molasses, bricks, scrap, all types of mild steel (MS) products, copper and aluminium ware, stainless steel, gas burner, electric fan, bulb, bicycle parts and television have also come under the order.
Business-stage supply of 27 types of goods and manufacturers of taxable products whose business located in district cities and city corporation areas will also have to be registered as VAT-payers.
Supply of products including cement, ceramics and porcelain products, GP sheet and CI sheet, MS products, sanitary ware, aluminium fittings, air conditioner, refrigerator, television and other electrics and electronics products will fall under the category.
Services including hotels and restaurants (unless VAT-exempted by statutory regulatory order), sweetmeat shops, jewellers, beauty parlour, readymade garment shops, ride sharing, IT-based services, sales of products online, decorators and caterers, garage and workshop, dockyard, construction firm, furniture manufacturers and sellers, cinema hall, film distributor, warehouse, port, advertisement agency, printing press, land development and construction agency, telephone and internet agency, SIM card supplier, mechanised laundry, indenting agency, freight forwarders, clearing and forwarding agency, community centre, film studio, insurance company and courier and express mail service will have to be VAT-registered.
Consultancy firm, audit and accounting firm, shipping agent, air-conditioned bus and launch service, supplier, cultural event participating foreign artiste, satellite cable operator, security service, health club and fitness centre, sports event organiser, transport contractors, architect, interior designer or interior decorator, graphic designer, engineering firm, advisement broadcaster through satellite channels, banking and non-banking service providers, credit card supplier, money changers, air-conditioned tailoring shops, amusement park, picnic and shooting spot and coaching centres will have to obtain e-BINs and pay taxes at applicable rates.
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