The government in the proposed national budget has imposed 7.5 per cent value-added tax on e-commerce services and raised the VAT on branded and non-branded clothing stores to 7.5 per cent from 5 per cent.
Though 5 per cent VAT was applicable to online sales, purchase and transfer of some costly and luxury products like car, furniture, air conditioner, television, gold, foreign-brand clothes and footwear, e-commerce services remained VAT-free.
Finance minister AHM Mustafa Kamal on Thursday proposed the measures with an amendment to the new VAT and Supplementary Duty Act-2012 placed before parliament as part of his budget proposals.
Kamal also proposed to reduce VAT on amusement park and theme park to 7.5 per cent from 15 per cent, on indenting agency and air-conditioned launch services to 5 per cent from 15 per cent, on non-air-conditioned hotel and restaurant and construction agency to 7.5 per cent from 7 per cent.
He proposed to increase VAT on procurement providers and buyers of auction products to 7.5 per cent from 5 per cent.
VAT at the rate of 7.5 per cent has newly been imposed on furniture manufacturers, and 15 per cent VAT has newly been imposed on astrologists, marriage media services and on supply of entertainment programmes, serials, drama and telefilms to be broadcasted on the television channels and online media like YouTube and Facebook.
The rates of VAT have also been reduced for a number of services including printing press, auction agency, film studio, mechanised laundry service, cinema hall, security service, participants at board meeting, tailoring shop and tailors and cleaning agency to 10 per cent from 15 per cent.
In addition to that, 15 per cent VAT is applicable to a number of other services including decoration and catering, warehouse, port services, advertisement agency, clearing and forwarding service, travel agency and community centres.
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