Export-oriented industries are set to enjoy a relief from furnishing declarations to the VAT authority on usage of raw materials for manufacturing the finished products.
However, only the 100 per cent export-oriented industries will be entitled to enjoy the facility.
The facility has been given by amending the VAT and Supplementary Duty Rule-2016 to ease the burden of submitting documents by the exporters.
The amendment was brought in the proposed Finance Bill - 2020 and it is set to become effective from July 01, 2020.
Officials said the 100 per cent export-oriented sector is exempted from payment of VAT so they need not to take the trouble to submit the declaration of probable usage of raw materials needed for producing the finished products.
On July 1, 2019, the National Board of Revenue made submission of the document, named 'Input-output coefficient', mandatory for the manufacturers including all exporters.
The rules had become effective with the implementation of the new VAT law-2012.
Exporters, however, hailed the measure and termed it business-friendly.
Md Golam Mowla, a representative of an export-oriented industry, said the measure will help the exporters get rid of submitting unnecessary documents which is time-consuming.
He said the export-oriented sector is enjoying the government tax incentives and exemption from VAT and other import duties.
The Institute of Chartered Accountants, Bangladesh (ICAB) fellow member Snehasiash Barua said a positive change was brought in the Finance Bill 2020 for the exporters.
Currently, the exporters are not required to pay any output VAT on sales as these are considered zero rated, said Mr. Barua, who is also a partner of Snehasish Mahmud & Co.
As per the VAT law, exporters had to pay Tk 10,000 for their failure in submission of the coefficient.
There is a prescribed form for submission of input-output coefficient.
He said an exporter can claim input VAT, if any, as decreasing adjustment as per the changes brought in section 2(103) of the act.
Barua, however, mentioned that the government may consider withdrawing the requirement of usage of mandatory software for the exporters.
As per VAT rules, businesses having annual turnover above Tk 50 million require to procure software from NBR's selected companies for maintenance of accounts.
He said that such rules increase the cost to the export-oriented company that are exempted from payment of VAT.
Talking to the FE, a senior VAT commissioner said withdrawal of the provision would help both VAT officials and exporters from unnecessary paper work.
However, other exporters who are not 100 per cent export-oriented and have local sales will have to submit the coefficient, the official said.
It should be transparent to see what quantity of raw materials is used for producing final products for checking the evasion of taxes, she said.
