[Ref.

:]

[Date:]

The Managing Director/CEO/Finance Director/CFO/Finance Controller

[Name of the Company]
[Address of the Company]

[Dear Sir/Madam:]

Guideline on withholding VAT

Under the prevailing provisions of the Value Added Tax Act-1991, several payments made
by your organization are subject to collection/deduction of VAT at source. The provisions
interalia involves the following:

o Responsibility for collection/deduction of VAT at source;

o Deposit of collected/deducted VAT to the Government treasury within the stipulated
time;
o Responsibility for issuance of certificate to the supplier within the stipulated time;
o Submission of copy of certificate and original copy of Treasury Challan against
deposit of collected/deducted VAT to the respective VAT authority within the
stipulated time;
o Interest for delay depositing of collected/deducted VAT; and
o Consequences for non-compliance with the provisions of the VAT Act, 1991
regarding withholding VAT.

For proper compliance with the statute and to avoid the associated penal provisions as well,
we have summarized the related provisions on withholding VAT and attached herewith this
letter.

Do let us know for further clarification or information.

Thanking You.

Sincerely yours,

Ahmed Mashuque & Co.

Chartered Accountants
 Contents

RESPONSIBILITY TO DEDUCT VAT AT SOURCE: ....................................................4

RESTRICTION ON PROCURING GOODS OR SERVICES: ......................................6
RESPONSIBILITY OF THE SUPPLIER: ..........................................................................7
NAME OF SERVICE AND WITHHOLDING VAT RATE: .............................................8
PROVISIONS REGARDING DEDUCTION OF VAT AT SOURCE FOR
SERVICE OF PROCUREMENT PROVIDER (SERVICE CODE: S
037.00): ................................................................................................................................11
VAT ON OFFICE RENT: ....................................................................................................13
DEPOSIT OF VDS AMOUNT TO THE GOVERNMENT TREASURY AND
REPORTING: ........................................................................................................................14
DISCLOSURES IN THE VAT RETURN (VAT-19): ....................................................16
DUTIES OF THE SUPPLIER OF SERVICES/SERVICE PROVIDERS FOR
DISCLOSURES IN THE VAT RETURN (VAT-19): ....................................................17
PERIOD OF PRESERVING VDS RECORDS: ..............................................................19
MISCELLANEOUS: .............................................................................................................20
CONSEQUENCE OF DEFAULT ON WITHHOLDING VAT: .....................................22
RESPONSIBILITY TOWARDS WITHHOLDING VAT IN BRIEF:...........................23
REFERENCES: .....................................................................................................................24
ATTACHMENTS: .................................................................................................................25
o T. R. FORM NO-6: ............................................................................................................... 26
o Form “VAT-12 Kha”: ......................................................................................................... 27
o Form “VAT-19”: .................................................................................................................... 28

Guideline on withholding VAT with effect from 01 July 2017 Page 3 of 29

RESPONSIBILITY TO DEDUCT VAT AT SOURCE:
Following organization or entity (hereinafter referred to as “withholding entity”) is
responsible for collecting/deducting VAT at source at the time of making payment against
services received:

(a) Government, Semi-Government or Autonomous Bodies;

(b) N.G.O (“NGO” means any private organization registered under the NGO Affairs
Bureau or, where applicable, the Ministry, Division or Directorate);
(c) Bank, Insurance Companies or any other Financial Institutions;
(d) Limited Company;
(e) Educational Institutions; and
(f) Organization having annual turnover of more than Taka one crore (Explanation: Here,
organization will include proprietorship and partnership business as well.)

o In case of getting services in Bangladesh from outside the geographical area of

Bangladesh, at the time of making payment of service value in partial or full to the
supplier of service through bank or financial institution, VAT at applicable rate will
be deducted at source by bank or any other financial institution.

Exemption: 100 % VAT is exempted w. e. f. 05 June 2014 for the VAT registered
100 % Exporter, 100 % deemed exporter and organization situated in
the Export Processing Zone (EPZ) for making payment of service
value against getting services in Bangladesh from outside the
geographical area of Bangladesh to be used at manufacturing stage of
exportable goods.

o Deduction of VAT at source in case of miscellaneous fees, royalty, charge, etc:

A. VAT @ 15 % has to be deducted at source from the total amount received

from the beneficiary at the time of issuing license, registration, permit and also
renewal thereof by Government, Semi Government, Autonomous Body and
Local Authority as per the provisions of the prevailing law.

Exemption:

In case of issuing license and renewal thereof for Jute and Jute related
products business, Govt. has granted exemption from applicable VAT at
source. [Ref.: Serial Number 4]

Determination of tariff value:

(a) In case of issuing 3G license or renewal, Tariff value has been fixed
for imposing VAT and where applicable, VAT and Supplementary
Duty @ 33.33 % of determined/fixed value for license or spectrum

Guideline on withholding VAT with effect from 01 July 2017 Page 4 of 29

 fees or charge or Royalty or renewal fees thereof received or
receivable by BTRC [Ref.: Serial Number 5]

(b) In case of issuing license or renewal thereof, Spectrum fees or renewal

thereof to Wimax Operator, Broadband Wireless Access (BWA)
Operator and Internet Service Provider (ISP), Tariff value has been
fixed for imposing VAT and where applicable, VAT and
Supplementary Duty @ 33.33 % of determined/fixed value for license
or spectrum fee or charge or Royalty or renewal fee thereof received or
receivable by BTRC [Ref.: Serial Number 6]

B. VAT @ 15 % has to be deducted and collected at source from the beneficiary

on the total amount received or receivable by means of revenue sharing,
royalty, commission, charge, fees or by other means in line with the terms and
conditions of issued license, registration, permit by Government, Semi
government, Autonomous Body and Local Authority as per the provisions of
the prevailing law.

Exemption:

In case of Revenue Sharing by Mobile Operators with BTRC as per conditions

of using 2G/3G license, BTRC is exempted from deduction/collection of VAT
at source against payable revenue by Mobile Operators. [Ref.: Serial Number
7 & 8]

C. VAT has to be deducted and collected at source by the concerned connection

providing organization on total amount received from the beneficiary during
providing connection of water, electricity, gas and telephone.

o Both parties (withholding entity and supplier) will jointly be responsible for
deductible VAT amount at source. And if partial amount of VAT is deducted at
source out of total VAT payable amount from the supplier against supply, the supplier
will not get exemption from payment of residual VAT amount.

Guideline on withholding VAT with effect from 01 July 2017 Page 5 of 29

RESTRICTION ON PROCURING GOODS OR SERVICES:
o An entity without having VAT registration or turnover tax enlistment cannot attend in
tender participation or work order cannot be issued to the said person.

o Receive/procurement of goods or services without Tax Challanpattra (viz. Form

VAT-11/VAT-11Ka/VAT-11Gha/other documents as approved by the National
Board of Revenue as Challanpattra through Govt. Gazette notification) by any VAT
registered person shall be considered as offence punishable under section 37.

Guideline on withholding VAT with effect from 01 July 2017 Page 6 of 29

RESPONSIBILITY OF THE SUPPLIER:
During supply of services to withholding entity against tender or work order, supplier of
services-

(a) will issue VAT Challan at actual rate;

(b) will mention total amount of VAT in the issued sales Challan or commercial
documents; and
(c) will mention his VAT registration number and the matter of supplying services
against tender or work order in the sales Challan or commercial documents.

Guideline on withholding VAT with effect from 01 July 2017 Page 7 of 29

NAME OF SERVICE AND WITHHOLDING VAT RATE:
Withholding entity shall deduct VAT at source as Mandatory against following Services at
the rate mentioned in table below:

Table

Sl. Service
Service Heading Rate of VAT
No. Code
01. S 002.00 Decorators and Caterers 15 %
02. S 003.10 Garage and workshop of Motor Vehicles 10 %
03. S 003.20 Dockyard 10 %
04. S 004.00 Construction Firm 6%
05. S 007.00 Advertising Firm (Note-1) 15 %
06. S 008.10 Printing Press 15 %
07. S009.00 Auctioning Firm 15 %
08. S 010.10 Land Development Organization 3%
Building Construction Organization

S 010.20 a) 1-1100 Sft 1.50 %

09. b) 1101-1600 Sft 2.50 %
c) 1601- Up Sft 4.50 %
10. S 014.00 Indenting Agency 15 %
11. S 020.00 Surveying Organization 15 %
Plant or Capital Machineries letting
12. S 021.00 15 %
organization
o At manufacturing
stage-6 %.
o At trading stage
(showroom) -4%
13. S 024.00 Furniture Sales Centre (Note-2) (Subject to
availability of VAT
paid Challan @ 6 %
at manufacturing
stage)
14. S 028.00 Courier and Express Mail Service 15 %
Repairing or Servicing of taxable goods
15. S 031.00 by person or organization against 15 %
consideration
16. S 032.00 Consultancy firm and Supervisory firm 15 %
17. S 033.00 Izaradar (Lessor) 15 %
18. S 034.00 Audit & Accounting Firm 15 %
19. S 037.00 Procurement Provider (Note-3) 5%
20. S 040.00 Security Service (Note-3) 15 %
21. S 045.00 Legal Advisor 15 %
o Transportation of
Transport Contractor (Note-3) Petroleum products-
22. S 048.00
4.50 %
o Others-10 %

Guideline on withholding VAT with effect from 01 July 2017 Page 8 of 29

 Sl. Service
Service Heading Rate of VAT
No. Code
23. S 049.00 Rent a Car service (excluding Taxi Cab) 15 %
Architect, Interior Designer or Interior
24. S 050.10 15 %
Decorator
25. S 050.20 Graphic Designer 15 %
26. S 051.00 Engineering Firm 15 %
Sound and Lighting equipments letting
27. S 052.00 15 %
organization
28. S 053.00 Person attending on board meeting 15 %
29. S 054.00 Advertiser through satellite channel 15 %
Chartered Biman or Helicopter letting
30. S 058.00 15 %
organization
31. S 060.00 Purchaser of auctioned goods 4%
Organization related to
32. S 065.00 Cleaning/maintenance services of 15 %
Building, floor and premises
33. S 066.00 Seller of lottery ticket 15 %
Event Management related organization
34. S 071.00 15 %
(Program Organizer)
Human Resources supply & management
35. S 072.00 15 %
related organization (Note-4)
Information Technology Enabled
36. S 099.10 4.5 %
Services (ITES)
37. S 099.20 Other Miscellaneous Service 15 %
38. S 099.30 Sponsorship Services 15 %
39. S 099.60 Credit Rating Agency 15 %

Notes:

(1) If an Advertisement firm submits VAT-11 Challan or other challan which is

considered as VAT-11 challan, duly attested by the Revenue Officer/Asst. Revenue
Officer of the respective Local VAT Office, in that case deduction of VAT at source
will not be required. However, if such attested VAT Challan is not available then
VAT @ 15% has to be deducted at source.

(2) If furniture is supplied from Showroom under Service Code: S024.00 and the
Showroom provides VAT Challan against VAT paid @ 6 % at manufacturing stage,
VAT shall be deducted at source @ 4 % and if VAT Challan is not available with
Showroom against payment of VAT @ 6 % at manufacturing stage, VAT shall be
deducted at source @ 10 %.

Further, if manufacturer and trader is same person and furniture is supplied directly
from the factory under Service Code: S024.00, VAT @ 4 % shall be deducted at
source subject to having VAT Challan @ 6 %. Otherwise, 10 % VAT shall be
deducted at source.

(3) 100 % VAT is exempted w. e. f. 05 June 2014 for the VAT registered 100 %
Exporter, 100 % deemed exporter and organization situated in the Export Processing

Guideline on withholding VAT with effect from 01 July 2017 Page 9 of 29

 Zone (EPZ) on getting services of Procurement Provider (Service Code: S037.00),
Security Service (Service Code: S040.00) and Transport Contractor (Service Code:
S048.00) to be used at manufacturing stage of exportable goods.

(4) In case of Human Resources Supply or Management related service under Service
Code: S072.00, VAT shall be deducted on full amount/full consideration payable to
Human Resources Supply or Management related service provider rather than on
commission/ service charge.

Special Notes:

(1) In case of purchase of any goods or service by a withholding entity, value of which is
not more than Tk. 1,000, against quotation or tender or any other means then VAT
deduction at source shall not be applicable.

(2) Except the Supplier of services/Service Provider as described in above table, rest of
the Supplier of services are not under the ambit of VAT deduction at source. Further,
purchase of goods or services must be supported by the VAT Challan or have a
treasury challan/copy of respective page of VAT Current Account (VAT-18) against
payment of VAT or by any other documents. If any of such evidence is not available,
applicable VAT has to be deducted or collected at source from the supplier of services
or goods while such are not under the ambit of VAT deduction at source.

Guideline on withholding VAT with effect from 01 July 2017 Page 10 of 29

PROVISIONS REGARDING DEDUCTION OF VAT AT
SOURCE FOR SERVICE OF PROCUREMENT PROVIDER
(SERVICE CODE: S 037.00):
o Definition of “Procurement Provider” is given below for ease of reference:

“Procurement Provider” means any Person, Institution or Association who supplies

taxable goods or service or both in exchange of consideration to various Government,
Semi-Government, Autonomous body, Non Government Organization (NGO), Bank,
Insurance or any other financial institution, limited company, Organization having
annual turnover of more than one crore or educational institution against quotation or
tender or any other means.

o In addition to purchase through banking channel, purchase of taxable goods or

service or both in cash for any amount will also be included under the service of
“Procurement Provider (Service Code: S 037.00)”. Hence, for the said transactions,
VAT has to be deducted at source or the Purchaser will deposit the VAT amount @ 5
% on the said transactions to the Government Treasury from own fund.

Notes:

(a) Goods, not included in the 1st Schedule of the VAT Act, 1991 and services,
not included in the 2nd Schedule of the VAT Act, 1991 will only be considered
as taxable goods and services respectively.

(b) As VAT exemption through S.R.O. is given at different stages of taxable

goods or services only and not for all stages, VAT shall be deducted at source
in such cases.

o Following supply of goods or providence of services shall not be treated as

Procurement Provider and accordingly, deduction of VAT at source is not applicable
thereto:

(a) If supply of goods is received from Manufacturer or Businessman through

VAT-11/VAT-11Ka Challan along with payment of 15 % VAT.

(b) If (i) supply of goods is received directly from Manufacturer/Producer or

businessman through VAT-11 Challan or VAT-11Ka Challan or any Challan,
considered as VAT-11 Challan; and (ii) supply of goods is received directly
from an organization(s), enlisted under Turnover Tax or Cottage Industry,
through cash memo bearing enlistment number.

(c) If supply of goods (which are exempted at manufacturing stage through

S.R.O.) is received from a manufacturer directly through VAT-11
challan/VAT-11Ka Challan.

o VAT shall not be applicable in case of following supply under Procurement Provider:

(a) Supply of tiffin to school;

Guideline on withholding VAT with effect from 01 July 2017 Page 11 of 29

 (b) Supply of printed text book of primary & secondary level and equivalent level
against work order of the National Curriculum & Text book Board;
(c) Supply of Cotton;
(d) Supply of waste and scrap paper;
(e) Supply of cullet;
(f) Supply of plastic waste;
(g) Supply of bone of Cow and buffalo to be used as input of gelatin capsule;
(h) Supply of locally collected scrap to steel mill; and
(i) Supply of jute products.

o In case of supply of service by Service providers, who have specific definition, shall
not fall under Procurement Provider.

o If goods are supplied after procuring from Manufacturer or other Businessman

(except Small Retail Businessman, paying VAT under fixed value addition) or
importing, such shall be treated as Procurement Provider and accordingly deduction
of VAT at source @ 5% is applicable.

Guideline on withholding VAT with effect from 01 July 2017 Page 12 of 29

VAT ON OFFICE RENT:
o VAT on rental amount for using space and structure on rental basis is payable by the
Renter (Tenant). Such is not VAT deduction at source. Definition of “Space and
Structure Renter” under Service Code: S074.00 is given below:

“Space and Structure Renter” means such person, organization or firm who are
entitled to use any space or structure, not for residential purpose, for a fixed period
against consideration. After expiry of the fixed period, acquiring such renewable
entitlement will also be included herewith.

o Present rate of VAT is 15 %.

o Exemption available from payment of VAT on rental amount of space and structure
for the following cases:

(a) Registered/enlisted manufacturer or producer for factory purpose;

(b) For use of residential purpose;
(c) Space or structure used for commercial purpose, area of which is not more
than 150 Square Feet; and
(d) Information Technology Enabled Service (ITES) provider, registered as per
the VAT Act, 1991 under Service Code: S099.10.

o Deposit of VAT on rental amount of space and structure by VAT non-registered

company/entity:

Many companies/entities have rented office while they do not have business activities
of taxable goods or services or have no import or export activity of any goods or
services from that office.

Such VAT on office rent has to be deposited by the company/entity mentioning the
Code: 1-1133-Respective VAT Commissionerate Code [(Commissionerate under
which the office is situated)-0311 in the Treasury Challan (T.R. Form No.-6)] to the
Government Treasury.

For the above activities, the company/entity is not required-

(a) to take VAT Registration for that office;

(b) to keep VAT related documents; and
(c) to submit Monthly VAT Return (VAT-19).

Whereas original treasury challan for depositing VAT on office rent has to be
submitted to the respective Local VAT Circle (under which the office is situated).
[Ref.: Serial Number 9].

Guideline on withholding VAT with effect from 01 July 2017 Page 13 of 29

DEPOSIT OF VDS AMOUNT TO THE GOVERNMENT
TREASURY AND REPORTING:
o Deducted VAT at Source (VDS) amount has to be deposited to the Govt. Treasury by
the withholding entity within 15 (fifteen) working days of such deduction.

o Mode and Form of deposit to Government Treasury: T.R. Form no-6 and either in
cash or cheque.

o Content of Treasury Challan:

A. Respective Code number of VAT;

B. Column-1: Name, address, VAT Registration Number (if any), Circle and
Commissionerate of the Supply receiver of services;
C. Column-2: Name, address, VAT Registration Number, Circle,
Commissionerate of the Supplier of services. In case of depositing deducted
VAT amount against several suppliers through one Treasury Challan, “details
as per overleaf” has to be mentioned instead of the Name, address, VAT
Registration Number, Circle, Commissionerate of the Supplier of services.
And accordingly, details of the suppliers of services/goods (Name, address,
VAT Registration Number, Circle, Commissionerate and deducted VAT
amount) has to be mentioned in overleaf;
D. Nature of supply of services with service code and rate of VAT;
E. Mode of payment; and
F. Amount of VAT.

o As per clarification # CGA/Accounts and CDPEU/Treasury Rules/315/91 dated 21

September 2010 of the office of the Controller General of Accounts, Government of
the People’s Republic of Bangladesh, single cheque is required to be issued for
depositing each Treasury Challan separately. Again, more than one cheque cannot be
used for a single Treasury Challan.

o Code of deposit of deducted VAT:

The Account Code (1-1133-VAT Commissionerate Code of Service Receiver-0311)

in the treasury Challan have to be mentioned at the time of depositing withholding
VAT to the Government Treasury. VAT Commissionerate Account Codes of Service
Receiver are given below:

Name of the Office : Value Added Account Code for

Tax (VAT) Commissionerate VAT

Dhaka (South) 1/1133/0010/0311

Dhaka (North) 1/1133/0015/0311
Dhaka (East) 1/1133/0030/0311
Dhaka (West) 1/1133/0035/0311
Rajshahi 1/1133/0020/0311
Chittagong 1/1133/0025/0311
Comilla 1/1133/0040/0311

Guideline on withholding VAT with effect from 01 July 2017 Page 14 of 29

 Jessore 1/1133/0005/0311
Khulna 1/1133/0001/0311
Large Tax payer Unit (VAT) 1/1133/0006/0311
Rangpur 1/1133/0045/0311
Sylhet 1/1133/0018/0311

o Withholding entity shall issue a certificate in prescribed Form “VAT-12Kha” along

with the original copy of the respective Treasury Challan to the concerned VAT
Circle Office within 5 (five) working days after depositing the VDS amount to the
Govt. Treasury and a copy of the said certificate along with a photocopy of respective
attested treasury challan shall be provided to the supplier of service.

And withholding entity shall have to maintain chronological serial number for “VAT-
12 Kha” considering the fiscal year July to June.

Further, withholding entity shall preserve a copy of aforesaid certificate along with a
copy of treasury challan in the office for 6 (six) years.

In addition to the above, withholding entity shall mention deducted as well as

deposited VAT amount in serial number 5 and 16 of VAT-19 for the respective tax
period.

o Content of Certificate (VAT-12 Kha):

A. Name, address and VAT Registration Number (if any) of the withholding
entity;
B. Business Identification Number (BIN);
C. Certificate number and date of the issuance;
D. Name and address of the Supplier;
E. BIN number of the Supplier;
F. Amount mentioned in the invoice/ VAT realizable value of goods or services
or commission;
G. Date of bill payment;
H. VDS Amount (in figure);
I. Applicable Service and Service Code;
J. Challan/Receipt/Certificate number and date of Treasury deposit/deposit
through online/book transfer; and
K. Remarks

Guideline on withholding VAT with effect from 01 July 2017 Page 15 of 29

DISCLOSURES IN THE VAT RETURN (VAT-19):
o Withholding entity shall mention deposited amount of deducted/collected VAT to the
Government Treasury in the serial number 5 and serial number 16 of the respective
monthly VAT-19 (VAT Return).

o The Supplier shall mention the deducted VAT amount in the serial number 19 of the
VAT-19 (VAT Return) during the tax period or in the following tax period of VAT
deduction certificate awarded to him.

Guideline on withholding VAT with effect from 01 July 2017 Page 16 of 29

DUTIES OF THE SUPPLIER OF SERVICES/SERVICE
PROVIDERS FOR DISCLOSURES IN THE VAT RETURN
(VAT-19):
Situation-1: Disclosure in the VAT Return about withheld VAT where VAT is not
paid by the Service Provider for the related transaction:

o Column 3 and column 5 of serial number 1 (Net sales of VATable goods, services or
goods and services) of VAT-19 has to be filled up for the respective month. Value
against supply of services and total VAT thereon has to be mentioned in column 3 and
5 of serial number 1 respectively. Out of total VAT, VAT deductible at source amount
shall have to mention within first bracket in column number 5 of serial number 1.

o Under serial number 4 (Total payable VAT) of VAT-19, rest of the VAT amount
(total payable VAT as per serial number 1 less deductible amount of VAT at source as
mentioned within first bracket in column 5 of serial number 1) shall have to be
mentioned.

o Calculation of VAT amount to be disclosed under serial number 19 of VAT-19 within

first bracket and outside first bracket will be as under:

Outside first bracket:

If the Service Provider receives certificate(s) against deducted VAT at source in

prescribed Form “VAT-12 Kha”, the Service Provider shall mention the VAT amount
outside first bracket under serial number 19 of VAT-19 as per the said certificate(s)
during the tax period or in the following tax period (if not disclosed earlier under
outside bracket) of VAT deduction certificate awarded to the Service Provider.

Within first bracket:

Amount within first bracket under serial number 19 of previous month’s VAT-19 plus
first bracket amount of column 5 of serial number 1 of VAT-19 of current month less
amount outside first bracket as mentioned under serial number 19 of VAT-19 of
current month against available “VAT-12 Kha”.

o Awarded certificate in Form “VAT-12 Kha” along with the copy of the attested (by
the respective officer of the VAT authority) treasury challan shall have to be attached
with the respective monthly VAT Return (VAT-19).

Situation-2: Adjustment of withheld VAT through Monthly VAT Return where VAT
is already paid by the Service Provider for the related transaction:

Although Service providers (whose services are under the ambit of withholding VAT)
provide services after payment of VAT, Service Receivers shall deduct or collect VAT at
source from the related transaction.

Under the above circumstances, following procedures shall have to be followed by the
Service Providers for adjustment of deducted or collected VAT at source:

Guideline on withholding VAT with effect from 01 July 2017 Page 17 of 29

o Total sales and applicable VAT thereon has to be mentioned in column 3 and column
5 respectively under serial number 1 (Net sales of VATable goods, services or goods
and services) of VAT-19 (VAT Return). Accordingly, VAT amount of column 5 of
serial number 1 has to be mentioned under serial number 4 of VAT-19.

o If the Service Provider gets certificate(s) in Form “VAT-12 Kha” against deducted
VAT at source for which the Service Provider also paid VAT, total amount of VAT as
per the said certificate has to be mentioned under serial number 12 of VAT-19 for
adjustment during the tax period or in the following tax period (if not adjusted earlier)
of the VAT deduction certificate awarded to the Service Provider.

o The Service Provider shall also mention the VAT amount under serial number 19 of
VAT-19 as per the certificate(s) during the tax period or in the following tax period (if
not disclosed earlier) of VAT deduction certificate awarded to the Service Provider.

o Awarded certificate(s) in Form “VAT-12 Kha” along with the copy of the attested (by
the respective officer of the VAT authority) treasury challan shall have to be attached
with the respective monthly VAT Return (VAT-19).

Guideline on withholding VAT with effect from 01 July 2017 Page 18 of 29

PERIOD OF PRESERVING VDS RECORDS:
VDS related documents have to be preserved for 6 (six) years by the withholding entity.

Guideline on withholding VAT with effect from 01 July 2017 Page 19 of 29

MISCELLANEOUS:
o VAT is not required to be deducted at source against payment of Gas bill, Electricity
bill, Telephone bill, Mobile phone bill, Water bill.

o Deducted VAT by the Sale centers of any Centrally Registered Organization will have
to be deposited to the Government Treasury through Centrally registered office.

o If consideration is paid by the bank on behalf of a purchaser through local L/C or by

any other means against purchase of service, which is subject to deduction of VAT at
source, the said bank will deduct applicable VAT at source and deposit the same to
the Government Treasury.

o If the tender value is more or less than the declared value of a product, VAT shall
have to be paid on tender value at manufacturing stage. Tender value and the value
(including VAT) mentioned in VAT-11 Challan must be equal. In this case, deduction
of VAT at source will not be required.

o In some cases “Procurement Provider” imports goods for supply against tender or
work-order. Payment of Advance VAT at import stage will not be applicable in such
cases. Documents related to tender or work-order has to be submitted at the time of
assessment with the Customs Authority. VAT at source will be applicable at supply
stage considering “Procurement Provider.”

o If several elements/items are exists against one supply, complexicity arises in VAT
deduction at source. In such case, supplied items and value against each items have to
be mentioned separately in quotation, tender or bill. Accordingly, provisions of VAT
deduction at source will be applicable on each elements/items.

o Deposit of VDS amount by the VAT non-registered company/entity:

Many companies/entities have no business activities of taxable goods or services and

has also no import or export activity of any goods or services while they are
responsible to deduct or collect VAT at source in applicable cases as per rule 18 Ka of
the VAT Rules, 1991.

In such cases, they will deduct or collect VAT at source and such deducted or
collected VAT (VDS) has to be deposited within stipulated time mentioning the Code:
1-1133-Respective VAT Commissionerate Code [(Commissionerate under which the
office is situated)-0311 in the Treasury Challan (T.R. Form No.-6)] to the
Government Treasury. And VAT Registration number of the company/entity is not
required for depositing VDS amount through Treasury Challan.

For the above activities, the company/entity is not required to take VAT Registration
and is also not required to submit Monthly VAT Return (VAT-19). Whereas original
treasury challan for depositing VDS amount has to be submitted to the respective
local VAT circle (under which the company/entity’s office is situated) along with 1st
copy of the certificate in prescribed Form “VAT-12Kha”.

Guideline on withholding VAT with effect from 01 July 2017 Page 20 of 29

 Further, such certificate shall have to be issued within 5 working days after depositing
VDS amount to the Govt. Treasury. [Ref.: Serial Number 9].

Guideline on withholding VAT with effect from 01 July 2017 Page 21 of 29

CONSEQUENCE OF DEFAULT ON WITHHOLDING VAT:
o In case of failure to deposit the deducted VAT in the Govt. treasury within 15
working days of deduction, the concerned Commissioner may impose a personal
penalty, not exceeding Taka Twenty Five Thousand, on the person responsible for
deduction, the person responsible to deposit it and the Chief Executive Officer of the
concerned organization.

o If withholding entity, fails to deposit the deducted VAT amount to the Govt. treasury
within 15 working days of deduction, the said withholding entity shall have to pay
that unpaid amount together with an interest at the rate of 2 % per month from the
next day of the specified date.

o In spite of an obligation of deducting VAT at source and to deposit the same within
15 working days of deduction, if the withholding entity fails to deduct VAT and
deposit the same within stipulated time, the VAT amount shall be recoverable with
interest @ 2 % per month from the said withholding entity.

Guideline on withholding VAT with effect from 01 July 2017 Page 22 of 29

RESPONSIBILITY TOWARDS WITHHOLDING VAT IN
BRIEF:
o Make proper collection/deduction of VAT from the above payments.
o Ensure deposit of collected/deducted VAT within 15 (fifteen) working days from
collection/deduction.
o Mention proper code in Treasury Challan.
o Mention VDS amount in the monthly VAT Return (VAT-19).
o Issue and submit certificate in prescribed Form to the respective VAT
authority/person within 5 (Five) working days from deposit.
o Preserve VDS related documents for six years.

Guideline on withholding VAT with effect from 01 July 2017 Page 23 of 29

REFERENCES:

1. Clarification No. CGA/Accounts and CDPEU/Treasury Rules/315/91 dated 21

September 2010 of the office of the Controller General of Accounts, Government of
The People’s Republic of Bangladesh;
2. General Order No. 13/VAT/2017 dated 01 July 2017 of the National Board of
Revenue;
3. General Order No. 14/VAT/2017 dated 01 July 2017 of the National Board of
Revenue;
4. S.R.O. No- 128-Law/2015/734-VAT dated 04 June 2015 of the Internal Resources
Division, Ministry of Finance, Govt. of the People’s Republic of Bangladesh;
5. General Order No. 39/VAT/2013 dated 11 August 2013 of the National Board of
Revenue;
6. General Order No. 01/VAT/2014 dated 20 March 2014 of the National Board of
Revenue;
7. Special Order No. 13/VAT/2013 dated 12 August 2013 of the National Board of
Revenue;
8. Special Order No. 12/VAT/2013 dated 04 August 2013 of the National Board of
Revenue; and
9. Explanation no. 01/VAT/2014 dated 05 June 2014 of the National Board of Revenue.

Guideline on withholding VAT with effect from 01 July 2017 Page 24 of 29

ATTACHMENTS:
o T. R. Form No-6;
o Form “VAT-12 Kha”; and
o Form “VAT-19”.

Guideline on withholding VAT with effect from 01 July 2017 Page 25 of 29

 o T. R. FORM NO-6:

Pvjvb dig
wU, Avi dig bs 6 (&Gm, Avi 37 `ªóe¨)
1g (g~j) Kwc 2q Kwc 3q Kwc

Pvjvb bs -------------------------- ZvwiL -------------------------------

evsjv‡`k e¨vsK/†mvbvjx e¨vs‡Ki ------------------------ ‡Rjvi ------------------ kvLvq UvKv Rgv †`Iqvi Pvjvb

‡KvW bs

Rgv cÖ`vbKvix KZ…©K c~iY Kwi‡Z nB‡e wefv‡Mi bvg Ges Pvjv‡bi
hvnvi ‡h e¨w³i/cÖwZôv‡bi wK eve` Rgv †`Iqv gy`ªv I †bv‡Ui UvKvi AsK c„ôvsKbKvix Kg©KZ©vi bvg,
gvidZ cÖ`Ë c¶ nB‡Z UvKv cÖ`Ë nBj Zvnvi weeiY| weeiY/WªvdU, †c- c`ex I `ßi|*
nBj Zvnvi nBj Zvnvi bvg, AW©vi I †P‡Ki UvKv cqmv
bvg I c`ex I wVKvbv| weeiY|
wVKvbv|

‡gvU UvKv
UvKv (K_vq)
UvKv cvIqv †Mj
g¨v‡bRvi
ZvwiL ---------------------------
evsjv‡`k e¨vsK/†mvbvjx e¨vsK

†bvU t 1| mswkøó `߇ii mwnZ †hvMv‡hvM Kwiqv mwVK †KvW b¤^i Rvwbqv jB‡eb|
2| * †h mKj †¶‡Î Kg©KZ©v KZ…©K c„ôvsKb cÖ‡qvRb, †m mKj †¶‡Î cÖ‡hvR¨ nB‡e|

Guideline on withholding VAT with effect from 01 July 2017 Page 26 of 29

o Form “VAT-12 Kha”:

“dig g~mK- 12LÓ

[wewa 18L `ªóe¨]

MYcÖRvZš¿x evsjv‡`k miKvi

RvZxq ivR¯^ †evW©, XvKv

Dr†m g~mK KZ©‡bi cÖZ¨qbcÎ

Dr†m g~mK KZ©bKvixi bvgt ............................. e¨emvqx mbv³KiY b¤^i (BIN) t

wVKvbv t ...................................................... Bmy¨i ZvwiL t .......................
g~mK wbeÜb b¤^i (hw` _v‡K) t ........................
mvwU©wd‡KU b¤^i t .........................................

Avwg ..........................................., GB g‡g© cÖZ¨qb Kwi‡ZwQ †h, g~j¨ ms‡hvRb Ki (g~mK) AvBb I wewa Abyhvqx
wb‡gœ DwjøwLZ mieivnKvixi wbKU n‡Z Dr†m g~mK KZ©b Kiv nBqv‡Q| we¯ÍvwiZ wb‡gœ D‡jøL Kiv nBj t

µwgK mieivnKvixi mieivnKvixi we‡j wej Dr†m cÖ‡hvR¨ †UªRvwi‡Z/AbjvB‡b gšÍe¨

bs bvg I wVKvbv e¨emvqx DwjøwLZ cwi‡kv‡ai KwZ©Z ‡mevLvZ Ki Rgv cÖ`v‡bi/eyK
mbv³KiY A‡_©i ZvwiL g~m‡Ki I †KvW UªvÝdv‡ii
b¤^i cwigvY/ cwigvY Pvjvb/wiwmÞ/mb`
g~j¨ (As‡K) bs I ZvwiL
ms‡hvRb
Ki
wbiƒcY‡hvM¨
cY¨ ev
†mevi g~j¨
ev Kwgkb
(1) (2) (3) (4) (5) (6) (7) (8) (9)

Avwg (bvg I c`ex) -------------------------, mÁv‡b I mwVKfv‡e Dcwi-DwjøwLZ Z_¨ cÖ`vb Kwijvg|

bvg, c`ex I ¯^v¶i

cÖvcK t
ivR¯^ Kg©KZ©v,
.................... mv‡K©j
c~Y© wVKvbv ....................|

Abywjwc t
e¨e¯’vcbv cwiPvjK/¯^Z¡vwaKvix
‡gmvm© ....................................
c~Y© wVKvbv .................................

Guideline on withholding VAT with effect from 01 July 2017 Page 27 of 29

o Form “VAT-19”:
“g~mK-19”
MYcÖRvZš¿x evsjv‡`k miKvi
RvZxq ivR¯^ †evW©
XvKv
g~j¨ ms‡hvRb Ki `vwLjcÎ
[wewa 24(1) `ªóe¨]
(GB dig c~i‡Yi c~‡e© wb‡`©wkKv co–b)

gvm ermi
Ki †gqv` Ki`vZv mbv³KiY msL¨v

bvg t
wVKvbv t
‡dvb t

k~b¨ `vwLjcÎ (Ki †gqv‡` †Kvb µq weµq nq bvB) --------------------

weµq msµvšÍ Z_¨ weµq g~j¨ m¤ú~iK ïé g~j¨ ms‡hvRb Ki

1| Ki‡hvM¨ cY¨, †mev ev cY¨ I †mevi bxU weµq
2| k~b¨ nv‡ii cY¨ ev †mevi weµq (ißvwb)
3| Ae¨vnwZcÖvß cY¨, †mev ev cY¨ I †mevi bxU weµq
cÖ‡`q wnmve cwigvY
4| ‡gvU cÖ‡`q Ki (mvwi 1 nB‡Z SD+VAT)
5| Ab¨vb¨ mgš^qKiY (cÖ‡`q/Dr†m KZ©b/e‡Kqv/
A_©`Û/Rwigvbv/ ¯’vb I ¯’vcbv fvov MÖnYKvix)
6| me©‡gvU cÖ‡`q (mvwi 4+5)

µq msµvšÍ Z_¨ µq g~j¨ †iqvZ‡hvM¨ Ki

7| ¯’vbxq ch©v‡q Ki‡hvM¨ cY¨, †mev ev cY¨ I †mevi µq
8| Ki‡hvM¨ cY¨, †mev ev cY¨ I †mevi Avg`vwb
9| ißvwbi †¶‡Î Ab¨vb¨ Ki †iqvZ
10| Ae¨vnwZcÖvß cY¨, †mev ev cY¨ I †mevi µq

Dr†m KZ©b/†iqvZ/cÖZ¨c©Y wnmve cwigvY

11| ‡gvU †iqvZ‡hvM¨ Ki (mvwi 7+8+9)
12| Ab¨vb¨ mgš^qKiY (†iqvZ/cvIbv/Avg`vwb ch©v‡q AwMÖg g~mK/ Dr†m
cÖ`Ë g~mK)
13| c~e©eZ©x gv‡mi †Ri
14| me©‡gvU †iqvZ (mvwi 11+12+13)

P~ovšÍ wnmve cwigvY

15| bxU cÖ‡`q (mvwi 6-14)
16| ‡UªRvix‡Z Rgv
17| cieZ©x gv‡mi cÖviw¤¢K †Ri
18| cwi`ßi nB‡Z cÖZ¨c©Y
mieivnKvix KZ…©K Dr†m g~mK KZ©‡bi wnmve cwigvY
19| Dr†m KwZ©Z †gvU g~m‡Ki cwigvY

Guideline on withholding VAT with effect from 01 July 2017 Page 28 of 29

Avwg †NvlYv Kwi‡ZwQ †h, GB `vwLjc‡Î DwjøwLZ mKj Z_¨vw` mZ¨ I mwVK|

ZvwiL t Ki`vZvi ¯^v¶i I wmj

mshyw³ t wewa 24 G ewY©Z mKj `wjjvw`|
Awd‡mi e¨env‡ii Rb¨
(¯’vbxq g~j¨ ms‡hvRb Ki Kvh©vjq c~iY Kwi‡e)
ZvwiL gšÍe¨ t
1| cÖvwß
2| ivR¯^ Kg©KZ©v-Gi wbKU ‡cÖiY mnKvix ivR¯^ Kg©KZ©v-Gi ¯^v¶i I wmj

1| cÖvwß gšÍe¨ t
2| e›Ub
3| Kwgkbv‡iU Awd‡m †cÖiY ivR¯^ Kg©KZ©v-Gi ¯^v¶i I wmj
(Kwgkbv‡iU Awdm c~iY Kwi‡e) gšÍe¨ t
ZvwiL ¯^v¶i I wmj
1| cÖvwß
2| cwi`߇i †cÖiY
(cÖ‡hvR¨ †¶‡Î)
3| Kw¤úDUvi Gw›Uª
4| d‡jvAvc cÎ †cÖiY
gšÍe¨ t
(cwi`ßi c~iY Kwi‡e)
¯^v¶i I wmj
1| cÖvwßi ZvwiL t
2| ch©v‡jvPbv t
3| gšÍe¨ t

gÄyiK…Z UvKvi cwigvY t

Rgv cÖ`v‡bi GKvD›U b¤^i t
4| Kwgkbv‡iU Awd‡m †cÖiY (ZvwiL) t
ZvwiL t ................................
Kg©KZ©vi ¯^v¶i I wmj

The End

Guideline on withholding VAT with effect from 01 July 2017 Page 29 of 29