The finance ministry will not provide the National Board of Revenue (NBR) any allocation for repaying the extra tax paid in advance by the businesses. Sources at NBR said the ministry has recently clarified the board in a letter that it, in this financial year, would not keep any allocation for the board to repay the money of refunded VAT and duties.
The revenue board in this regard, sent the ministry’s directive to all Customs, Excise and VAT and Commissionerates for taking preparation to resolve the refund issue by itself as per the new directive. As per the existing tax rules, if any businesses pay the tax or duty in advance or pay extra than that of the payable amount at the beginning of the year, the revenue authority at the yearend will have to repay the additional amount to the claimants.
The exchequer now will have to resolve such issue as per the newly enacted Value-added Tax Act-2012. Earlier, the board at the beginning of the current fiscal sought allocation to the ministry for repaying the businesses’ refund worthy taxes. According to sources, the finance ministry in a letter informed the NBR that as per the Note-1 of General Financial Rules (GFR)-203, the refund of the collected tax will not be considered as government expenditure.
Besides, the regulation of GFR-204 has incorporated necessary provisions in this regard for NBR, as the tax authority. So, according to the GFR-203, and GFR-204, there is no need for keeping allocation for repayment of the tax refund, the letter reads. Apart from this, in the newly enacted Budget and Accounting Classification Systems (BACS), there is no code incorporated for refunding the tax. So, despite having NBR’s demand there is no scope for keeping allocation for this purpose.
Finance ministry sources said in the BACS, there have been kept separate economic code against the individual tax, corporate tax, VAT on domestic goods and services, SD on domestic goods and services, VAT on imported goods and SD on it. Besides, separate economic codes have also been set for turnover tax, excise duty, customs duty, and export duty.
Ministry officials said the receipt and payment will separately be included as a laser against every single economic code in the BACS system. In this regard the tax receipt will be credited and payment or refund will be debited against the economic code under IBAS++ system and NBR will have to register its revenue collection record such way. The government since the current fiscal year, introduced the IBAS++, a new software system to maintain the government’s economic accountancy and management.
A senior VAT official told Bangladesh Post that they sought allocation to the government for repaying the refunded tax of the businesses but they did not consider it, following the newly enacted rules and regulations. So, the VAT commissionerates will have to manage the refund money by themselves under the existing rules and regulations, he said.
In the new VAT law, it has been said that if a businesses pay extra tax or duty, he or she will be able to adjust it while submitting the VAT return at the yearend.
If the company is not a VAT registered entity, the authority of it will have to appeal for receiving the refund to the commissionerate offices and the commissioner in this regard will take step to refund it within the next three months.
With regard the source tax issue, it has been said that the taxpayers must adjust the refund appeal within six months after paying the tax. If he or she fail to do this within the certain timeframe, he later will not be allowed to appeal for getting the refund anymore.
