The National Board of Revenue relaxed the rules for issuance of central business identification numbers to large manufacturers to facilitate obtaining of central BINs by companies with separate raw material producing units and backward linkage entities.
Large companies that manufacture raw materials and backward linkage products for producing finished goods would now be eligible to obtain central BINs incorporating all of their units, according to a general order issued by the NBR on Tuesday.
A firm, however, would have to fulfill a set of conditions, including ensuring all raw materials are used by its own factories to produce identical or similar goods and maintaining accounts and records centrally, for obtaining central BIN or single VAT registration for all units of the firm, the order said.
Officials said that the value-added tax wing of the NBR relaxed the previous rules on issuance of central BINs and tax payment to resolve complexities related to central VAT registration.
Large manufacturers were facing problems in obtaining central BINs for their raw material producing units and backward linkage entities as field-level VAT offices were issuing the central BIN only to the entities engaged in production and supply of similar or identical goods as per the rules.
Bangladesh Association of the Pharmaceuticals Industries, among others, informed the revenue board that the members of the association were not getting the BINs under the new system.
Many companies from pharmaceutical and other sectors separately requested the NBR to provide the central registration for all of its manufacturing units engaged in producing raw materials, packaging materials, plastic bottles and other required materials for making the finished goods.
According to NBR officials, many businesses produced their raw materials at separate manufacturing units and later used them to produce similar or identical goods like medicines at their main manufacturing units.
Although raw materials like packaging materials are not similar or identical goods compared to finished goods like medicines, the condition pertaining to producing similar and identical goods for getting central BINs, as per original rules, would not be applicable for the businesses as they did not supply the raw materials to other businesses, they said.
According to the NBR order, businesses would get central BINs for all of their units, including ones producing raw materials, if they used all raw materials at their centrally registered factories.
Books of accounts, tax payment and other records related to economic activities like supply of goods and services should be maintained at the central unit for availing the benefit, it said.
Both the raw material producing units and finished goods manufacturing units will also have to submit input-output coefficient at the respective VAT commissionerates.
In case of transferring the products from one unit to another, the units will have to submit the VAT invoice or ‘form 6.5’ and to supply products to the consumers, the companies will have to provide VAT invoice in the ‘form 6.3’ to the consumers.
In another order issued on the day, NBR said that businesses must issue two sets of VAT invoice (chalan) in both cases of selling products and transferring the raw materials within units of centrally VAT registered company.
VAT invoice or ‘form 6.3’ issuance has been made mandatory for selling goods and services to consumers while ‘form 6.5’ has been made mandatory for transferring raw materials from one unit to another of the central BIN holders.
The invoices must be accompanied with the vehicles transporting goods until the vehicles reached their final destinations, it said.
Both buyers and sellers would have to preserve their respective chalan copies for five years, it said.
In case of transferring goods from one unit to another of a centrally registered company, both the units would have to preserve the chalan copy for five years.
Officials said that the VAT wing issued the order to prevent VAT evasion as it found that suppliers and buyers were not maintaining the VAT chalan.
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