Get VAT registration irrespective of turnover
The National Board of Revenue (NBR) has asked firms engaged in doing businesses of more than 170 products and services to get value added tax (VAT) registration irrespective of their turnover.
The instruction, issued on Sunday, stated that any business engaged in manufacturing, trading and providing various services has to get a business identification number (BIN) under the VAT and Supplementary Duty Act 2012, which came into effect from this month.
Following the order, firms processing milk to manufacturing chocolate, noodles, biscuits, medicine, soap and detergent, mosquito coil, plastic and leather goods, cement, rod and bricks, melamine, television, refrigerators and air conditioners will have to get BINs.
The same was obligatory under the VAT Act 1991, which has been replaced by the new law, said revenue officials.
The directive came due to the tendency of a section of businesses to claim turnovers lower than the actual figures to evade VAT.
For instance, 1951 firms, which were registered earlier under the VAT law 1991, claimed annual turnovers lower than Tk 50 lakh, the VAT exemption limit declared by the government to support and protect small and marginal business under the new law. More than 300 firms claimed turnovers below Tk 3 crore to avoid paying VAT at regular rates applied on goods and services, said officials.
“We took the decision when we saw that the number of VAT registration was falling,” said a senior NBR official.
The directive of mandatory registration irrespective of turnover will also allow the revenue collector to ascertain turnovers of individual businesses based on sales and see whose annual sales are below the exemption threshold.
As a result, the extent of disputes regarding turnover will remain low between revenue officials and businesses, said officials. In its order, the NBR directed operators of 78 types of services including shops, shopping malls, hotels, restaurants, construction firms and developers, internet service providers, sweets stores, ridesharing services and e-commerce firms to get VAT registration immediately.
The NBR said the order has been effective from July 1.
