Rules eased to adjust advance VAT
The revenue authority has relaxed the rules for businesses to help them adjust the VAT they paid in advance earlier as per the Value-Added Tax Act, 1991.
From now on, businesses will be able to adjust a maximum of 30 per cent of the amount of net VAT payable as per current monthly VAT return, according to the National Board of Revenue (NBR).
The previous adjustable threshold was 10 per cent.
The move comes as Tk 2,500 crore VAT got stuck that businesses paid to comply with a provision of the VAT Law 1991 because of the slow progress of adjustment.
The current VAT law, which came into effect in July 2019, does not have provisions for companies to pay VAT in advance during the release of goods from warehouses.
The NBR offered the scope to companies to adjust the previously deposited VAT with their monthly payable amount after the new law became effective.
Yet, the scope of monthly adjustments of VAT was not enough for businesses to make their current balance zero with the NBR's field offices.
Officials said the NBR hiked the ratio of adjustments with monthly payable VAT thrice to 30 per cent to enable firms to adjust VAT that firms had paid in advance under the 1991 law.
"This will ease working capital pressure for businesses," said Masud Sadiq, member for VAT policy of the NBR.
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