Cottage industries in Dhaka, Ctg will enjoy VAT waiver: NBR

Factories in the cottage industries operating in Dhaka and Chittagong cities will enjoy a waiver of value-added tax, the National Board of Revenue said yesterday.

There is no scope to force the cottage industries to get registration for VAT for their geographical location or turnover, the tax administrator said in a clarification sent to the field offices.

The revenue authority made the move after it came to know that some field offices, referring to budgetary measures, started asking operators of cottage industries in Dhaka and Chittagong to get VAT registration, irrespective of their annual turnover.

The NBR said businesses, which are not listed as companies, whose investments in plant, machinery and equipment do not exceed Tk 40 lakh in a year, and which do not have an annual turnover of above Tk 60 lakh, will be treated as cottage industries.

The NBR in 2013 issued an order waiving cottage industries from VAT or consumption tax payment.

Under the order, businesses have to apply to the field offices of VAT to be listed as cottage industry to get the VAT waiver.