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Guidelines For VAT Deduction at Source and VAT Rate For 2021-22
Guidelines For VAT Deduction at Source and VAT Rate For 2021-22
Compiled by:
MasumGazi
E-mail: masumgazi613@gmail.com
Linkedln: https://www.linkedin.com/in/taxprofessionalbd/
In association with:
Joy Saha
Linkedln: https://www.linkedin.com/in/joy-saha-78308b14S/
Mahmudul Hasan
Linkedln: https://www.linkedin.com/in/mahmudulhasan2107/
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Guidelines for VAT Deduction at Source (VDS)
Table of Contents
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Guidelines for VAT Deduction at Source (VDS)
1. Withholding entity
As per section 2(21) of VAT & SD Act, 2012 and rule 2(b) of SRO No. 149-Lawj2020j110-Mushak dated 11 June 2020, the following persons
shall be treated as "Withholding Entity":
• Any government entity or any of its ministry, division or attached department, a semi-government or autonomous body, state-owned entity,
local authority, council or similar nature of organization;
• Non-government organization approved by the NGO Affairs Bureau or the Directorate General of Social Welfare;
• Any bank, insurance company or similar nature of financial institution;
• Any educational institution of secondary or above level; and
• Any limited company.
2. Withholding of VAT
In case of goods:
• In case of a supply of goods mentioned in 3,d schedule (Serial no. 12, Table-2) where VAT is applicable at reduced (below 15%) or specific
rate, the total amount of VAT shall be deducted at source if the service receiver is a withholding entity.
In case of service:
• In case of services mentioned below serial number 11 (Table-I), where "Yes" is mentioned in column 6, VAT shall be deducted at source
mandatorily whether Mushak-6.3 is received or not. On the other hand, where "No" is mentioned, VAT shall not be deducted upon
receiving valid Mushak-6.3; without receiving valid Mushak-6.3, VAT shall be deducted at source at the applicable rate.
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Guidelines for VAT Deduction at Source (VDS)
• When issuing and renewing licenses or any other services provided by the Government, Semi-Government, Autonomous Body, and Local
Authority, VAT shall be collected at source at the rate of 15% on the total received amount. Further, in case of providing license, registration,
conditions mentioned in a permit for revenue sharing, royalty, commission, charge, fee or any other way, VAT shall be collected at the rate of
15% on total received;
• "Space and Structure Rent Receiver" shall collect VAT at the rate of 15% on the rental amount.
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Guidelines for VAT Deduction at Source (VDS)
• The registered and non-registered withholding entity shall deposit the deducted amount to the Government treasury within 15 days from
the payment date;
• The registered withholding entity will show the deducted amount as an increasing adjustment in the VAT return. The deposited withholding
VAT amount would be adjusted with the net VAT payable; if there is any shortfall, it would be deposited accordingly;
• The registered and non-registered withholding entity shall issue 3 (three) copies of certificate of VAT deduction at source (Mushak-6.6)
within 3 days from the date of depositing to the government treasury. Both original copy of Mushak-6.6 and treasury challan shall be
submitted to the concerned VAT circle office, 2nd copy shall be provided to the service provider, and 3'" copy shall be kept for 5 years by the
issuer;
• Withholding entities, whose transactions are settled by government accounts officer, deduction and deposit also shall be done by concerned
accounts officer.;
• The accounts officer shall issue 3 (three) copies of certificate of VAT deduction at source (Mushak-6.6) within 3 days from the date of
payment. Both original copy of Mushak-6.6 and treasury challan shall be submitted to the concerned VAT circle office, 2 nd copy shall be
provided to the service provider and 3'" copy shall be kept for 5 years by the issuer.
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Guidelines for VAT Deduction at Source (VDS)
Deducted VAT shall be deposited to Government Treasury in the following Deposit Code:
• Supplier shall present value of delivered goods or services and VAT amount in monthly VAT return (Mushak-9.1);
• Supplier will make a decreasing adjustment for deducted amount VAT in monthly VAT return (Mushak-9.1) upon receiving Mushak-6.6 and
condition that such deducted amount was previously shown as output tax.;
• Supplier is eligible for decreasing adjustment in that tax period on which Mushak-6.6 is received or the next tax period (total 2 tax periods).
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Guidelines for VAT Deduction at Source (VDS)
• Failure to deduct VAT at source and depositing the same to the government treasury, both withholding entity and supplier shall be
individually and jointly liable;
• Defaulter shall pay the deductible amount with half-yearly interest @ 2% and such person may be penalized personally amounting up to BOT
25,000.
10. Others
• VAT deducted by branch or sales center under central registration unit shall be deposited to government treasury by their Central Unit;
• Suppose there are multiple elements in a single supply and creates complications in withholding of VAT. In that case, the value of every single
component shall be mentioned in tender, quotation or invoice separately;
• Supply which is agreed/executed before comes into force of the VAT and SO Act, 2012 but payment is due, VAT shall be paid at the time of
making payment at current applicable rate.
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
11. VAT rate of services for the FY 2021-2022 in comparison with the FY 2020-2021 (Table-l)
SI. Service VAT Rate FY Required to
Service Name Area of VAT Exemption 3
No. Code 2021-2022 2020-2021 VDS
(1) (2) (3) (4) (5) (6) (7)
SOO1.00 Hotel and Restaurant:
S001.10 AC Hotel 15% 15% Yes All temporary hotels and restaurants in
1. Non-AC Hotel 7.5% 7.5% Yes Bangladesh (temporary means, a hotel and
AC Restaurant 15% 15% Yes restaurant without having wall, electric fan and
SOO1.20
Non-AC Restaurant 7.5% 7.5% Yes having not more than two electric lights).
2. S002.00 Decorators and Caterers 15% 15% Yes
S003.00 Motor Garage, Workshop and Dockyard:
3. S003.10 Motor Garage and Workshop 10% 10% Yes
S003.20 Dockyard 10% 10% Yes
(a) Construction work carried out relating to a
contract signed on or before 30 June 1991; and
4. S004.00 Construction Firm 7.5% 7.5% Yes (b) Work carried out based on a tender issued on
or before 30 June 1991 and contract signed until 30
June 1993.
SOOS.OO Storage & Warehousing and Port:
Storage & Warehousing 15% 15%
5. S005.10 No'
(Godown)
S005.20 Port 15% 15% No'
6. S006.00 Cold Storage Exempted Exempted Fully exempted.
7. S007.00 Advertising Agency 15% 15% Yes Death news published on newspaper.
SOOS.OO Printing Press and Binding Firm:
Printing charges on books, journals and
8. SOO8.10 Printing Press 10% 10% Yes
educational instruments for students.
SOO8.20 Binding Firm Exempted Exempted All kinds of binding charges.
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
79. S079.00 [Social Media and Virtual Business 1OmUted bySRO 234 d",d30 l"n,2019
80. S080.00 Ride Sharing 5% 5% No'
Information Technology
S099.10 5% 5% Yes
Enabled Services
Dying, printing, finishing and calendaring service
S099.20 Other Miscellaneous Services 15% 15% Yes
relating to grey fabrics.
81.
S099.3 0 Sponsorship Services 15% 15% Yes
S099.40 Meditation Service Exempted Exempted Exempted til/30 June 2022.
S099.50 Credit Rating Agency 7.5% 7.5% Yes
S099.60 Product Sale through Online 5% 5% No'
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VAT Rate of services forthe FY 2021-2022 in Comparison with the FY 2020-2021
Notes:
1. Where "No" is mentioned in Column-6 ofTable-1, VAT shall not be deducted at source upon receiving valid Mushak-6.3 otherwise,
VAT shall be deducted at source at the applicable rate;
2. Where ''Yes'' is mentioned in column-6 ofTable-1, VAT shall be deducted at source mandatorily whether Mushak-6.3 received or
not;
3. The above exemptions are provided by SRO No. 141/2021 dated 03 June 2021. To get exemption benefit, the service provider shall
submit monthly VAT return regularly and maintain books of accounts required as per section 51, 53, 54, 64 and 107 of VAT and SD
Act, 2012.
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
12. VAT rate of goods as per 3 rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021 (Table-2)
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
D. In case oflocal supply of the following goods, VAT shall be imposed atthe following specific rate:
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VAT rate of goods as per 3rd schedule for the FY 2021-2022 in comparison with the FY 2020-2021
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Supplementary Outy (SO) Rate for the FY 2021-2022 in Comparison with the FY 2020-2021
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Supplementary Duty (SD) Rate for the FY 2021-2022 in Comparison with the FY 2020-2021
Heading SD Rate FY
H.S.Code Description of Goods
No. 2021-2022 2020-2021
(1) (2) (3) (4) (5)
3305.10.00 Shampoo 15% 15%
3305.20.00 Preparations for permanent waving or straightening 10% 10%
3305.30.00 Hair lacquers 10% 10%
3305.90.00 Other 10% 10%
3307.10.00 Pre-shave, shaving or after-shave preparations 15% 15%
3307.20.00 Personal deodorants and antiperspirants 15% 15%
3307.30.00 Aromatic bath salts and other bath preparations 15% 15%
33.07
Used other preparations for dispelling bad smell of room (except augorbati and similar
3307.49.00 15% 15%
things)
3307.90.00 Others 15% 15%
All kinds of polyethylene bag, plastics bag made by polyethylene (including Woven plastics
39.23 All H.s. Codes 5% 5%
bag), and wrapped preparations
48.13 All H.s. Codes Cigarette paperjBidi paper (whether or not cut to size or in the form of booklets or tubes) 25% 25%
Gray ceramic stone paving plate (plaque) paving, hearth or wall tiles; ceramic mosaic cubes
69.07 All H.s. Codes 15% 15%
and the like, whether or not on a backing; finishing ceramics
Bright ceramic stone paving plate (plaque) paving, hearth or wall tiles; ceramic mosaic
69.08 All H.s. Codes 15% 15%
cubes and the like, whether or not on a backing; finishing ceramics
Concerned Ceramic sink, basin, pedestal basin, commode or its parts and other fittings and fixtures of
10% 10%
H.S. Codes bathroom (other than the long pan)
69.10
Concerned 30%
Ceramics bathtub and jacuzzies, shower, shower tray 30%
H.S. Codes
85.39 All H.s. Codes Other filament lamps except ultra-violetjinfra-red lamps; 0% 0%
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Supplementary Duty (SO) Rate for the FY 2021-2022 in Comparison with the FY 2020-2021
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Supplementary Duty (SO) Rate for the FY 2021-2022 in Comparison with the FY 2020-2021
References
1 . Standard VAT rate (15%) is determined by section 15 of the VAT and SD Act, 2012 and reduced VAT rate (below 15%) is
determined by 3 cd schedule of the VAT and SD Act, 2012.
2. The above presentation is prepared based on :
i. VAT & SD Act, 2012 & VAT & SD Rules, 2016;
ii. Finance bill 2021;
iii. SRO No . 149/2020, 180/2020, 332/2020 & 158/2021 (VDS related);
iv. SRO No. 186/2019, 234/2019 & 160/2021 (Definition of service);
v. SRO No . 141/2021 (Exemption) .
3. The green color represents changes/amendments, and red color represents the omission made in June 2021.
Declaration
This document is prepared on 11 June 2021, if any changes are made by the National Board of Revenue afterward, then those new
provisions/orders shall prevail.
If you have any query, you can communicate bye-mail at: masumgazi613@gmail.com or on
LinkedIn: https:jjwww.linkedin.comjinjtaxprofessionalbdj
Thank You
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