Deferred law's provisions now in VAT rules

The National Board of Revenue (NBR) has incorporated some provisions of the deferred VAT law into the existing VAT rules-1991 through amendments.
The inclusion of the provisions of the deferred Value Added Tax (VAT) and Supplementary Duty Act-2012 would be applicable to the businesses in obtaining VAT registration and submission of returns.
About ten provisions of the deferred law have been incorporated into the VAT rules-1991 through issuance of a Statutory Regulatory Order (SRO).
The new VAT law is now scheduled to come into force on July 01, 2019 after the government deferred it by two years.
The budget for fiscal year (FY) 2016-17 proposed enforcement of the law.
But later the government deferred it by two years in the face of stiff opposition from the businesses.
In the order dated June 29, 2018, the NBR gave a prescribed format for VAT returns by changing the return form under the VAT law-1991.
The Sections 4 to 14 of the deferred law have been incorporated into the existing VAT rules.
Talking to the FE, Zakir Hossain, additional commissioner of Dhaka East VAT Commissionerate, said the latest amendments to VAT rules would help the businesses submit VAT returns online.
The NBR was facing difficulties with introducing the online VAT return system in the absence of relevant provisions and updated VAT return forms under the VAT Rule-1991.
"According to a decision of the law ministry, rules of the new VAT law will be considered effective for VAT registration," he said.
The VAT registration process under the existing VAT law-1991 became ineffective after issuance of the latest SRO, he said.
A company would have to obtain single and central VAT registration as per the order, he said.
Currently, a company has multiple VAT registration numbers, known as Business Identification Numbers (BINs), to pay VAT under different field-level commissionerates.
They will have to obtain VAT registration centrally for all of their units and sister concerns from now on.
The new VAT return form has been prepared as per the standard dual-entry accounting system. It would help find inconsistency in the traditional current account and debit/credit note.
With the latest order, transfer of products from centrally-registered companies to other units, merging the multiple current accounts, management of deposited VAT in the current account and distribution of VAT collection targets for field-level offices will be changed significantly.
Talking to the FE, some field-level VAT commissioners said they were a little bit confused about the amendments to the VAT rules-1991.
"Businesses will have to submit VAT returns in August on their transaction in the month of July. We need a return fill-up guideline and instruction from the NBR regarding the change," said a VAT commissioner.
The VAT registration and return submission are the key process of VAT collection, he said.
When contacted, several members of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) said they could make comments on amendments to the VAT rules in mid-August.
They said businesses would submit VAT returns by August 15, using the new VAT return forms.
VAT policy member of NBR Rezaul Hasan said the NBR would need few more months to start the online VAT return submission.
The existing VAT online software needed some modifications for allowing online VAT returns, he said.
Meanwhile, the validity of old BINs expired on June 30. Now all businesses will have to use and obtain electronic BINs (e-BINs).

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