Presented by

Hadee Lutful & Co.

Chartered Accountants
Date: 01 July 2020
• “Input” means all raw materials, laboratory reagent, laboratory equipment, laboratory accessories, any used as fuel, packaging
materials, service, machinery and spare parts.

• However, the following goods or services shall not be regarded as inputs:

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❖ labour, land, building, office equipment and fixture; construction, balancing, modernization, replacement, expansion,
renovation and repair of any building or infrastructure or establishment;
❖ purchase or repair of all kinds of furniture, office supply, stationary, air conditioner, fan, lighting equipment, generator;
❖ interior design, architectural plan and design;
❖ leasing or hiring vehicle;
❖ travel, entertainment, staff welfare, development activity and goods or services related thereto;
❖ taking out lease on business premises, office, show-room or similar place, by whatever name called;

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 Provided that in the case of conducting business by a “trader” mentioned in paragraph (3) of the 3rd Schedule of the VAT &
SD Act, 2012, goods imported, purchased, acquired or procured in any other manner for sale, exchange or transfer in any
other means, shall be considered input.
***Ambiguity:
General Order No. 23/Mushak 2019 dated 26 October 2019 has been repealed by General Order No. 09/Mushak/2020
dated 11 June 2020. Definition of input provided u/s 18Ka will come into force from 01 July 2020. What will happen from 11
June 2020 to 30 June 2020?

Amendment to definition of Input Tax: Section 19

"Input tax" means VAT paid at import stage (excluding advance tax) for import of goods or service as inputs by a registered
person and VAT paid on purchase of goods or services as inputs from local source.
The words “immovable property” has been deleted from the existing definition.

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1 If the value of a taxable supply exceeds Tk. 1,00,000/= and
the consideration for the said supply is paid other than
through banking channel;
3 If input tax credit is not claimed in the same tax period in
which input is purchased or acquired through tax invoice or
bill of entry or next 4 tax periods;
5 VAT paid on goods or service that have not been recorded in
the books of accounts for purchase or purchase-sale
prescribed by rules;
7 In the case of receiving supply from importer, if the number
of bill of entry relating to import is not mentioned in the tax
invoice issued by the importer and description of goods
described in tax invoice does not match with the description
of goods described in bill of entry for import;
2 In the case of receiving supply of imported service, if the
output tax payable on the supply of the said service is not
shown in the return;
4 VAT paid on goods or service under custody or possession of
any other person;
6 If name, address and registration number of both purchaser
and seller is not mentioned in tax invoice;
8 In case of inputs or goods released upon furnishing bank
guarantee, input tax involved with the portion of bank
guarantee, until the causes for which bank guarantee was
furnished have not been finally settled;
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9 Input tax paid on goods or service used in the 10
production of exempted goods or service;
11 SD paid on goods and service used in the production of 12
goods or rendering service;
13 VAT paid on such inputs or goods which has not been 14
declared in input-output coefficient.
Turnover tax paid within the scope of turnover tax;
VAT paid on inputs purchased in the case of supply of
any specified goods or service on which VAT at a rate of
less than 15% or any specific tax has been imposed;
Where total value of inputs is increased at a rate
exceeding 7.5% but new input-output coefficient is not
submitted, additional increase in input tax.
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Sl # Credit for input tax paid on acquisition or import Exception
shall not be claimed
1 If the acquisition or import relates to a passenger Input tax credit may be claimed if dealing in vehicles, renting
vehicle, or its spare parts or for the repair and them out or supplying transportation services are included in
maintenance services of such vehicle. the economic activities of such person and the vehicle is
acquired for that purpose.
2 If the acquisition or import relates to entertainment Input tax rebate may be claimed if providing entertainment is
or is used for the purpose of entertainment. connected with the economic activities of the person
concerned and the entertainment is provided in the normal
course of his economic activities.
3 If the acquisition relates to a person’s membership or N/A
right of entry to a club, association or society of a
sporting, social or recreational nature;
4 If the acquisition exceeds 80% of expenditure related 80% of expenditure related to transportation services is eligible
to transportation services. for input tax credit.
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A registered person shall, in support of his claims for input tax credit, keep the following documents in his possession at the
time of filing return:

• in case of an import, a bill of entry bearing the name, address and BIN of the importer;
• in case of a supply, a tax invoice issued by the supplier;
• in case of a withholding tax entity, an integrated tax invoice and withholding tax certificate issued by the supplier;
• in case of section 20 (2), treasury challan in support of tax payment;
• in case of claiming input tax credit for VAT paid on gas, water, electricity and telephone services, bill issued by the
entities concerned which will be regarded as tax invoice.