The Value Added Taxation is a very popular system of taxation in the World. It maintains Transparency in levy and collection of Tax from the dealers.
The Tax is levied on sale of all goods in the country and is payable by the dealer on the value of goods. In order to avoid the cascading effect (i.e., tax on tax) of taxes, the tax paid on goods at the time of purchase will be allowed as credit. The credit availed can be used for setting off the output vat payable to the department at the time of resale of goods with or without any value addition. The net amount of tax payable by the dealer will only be on the Value added portion of goods & Services.
In Bangladesh, VAT is charged on the goods and services at a standard rate of 15%. Additionally duties like customs duty, Supplementary duty etc., are also charged. The VAT is charged on Sale value of goods after including the Customs Duty, Supplementary Duty and additional expenses as charged by the seller. VAT is calculated on the Total Value after considering all the aforesaid taxes and expenses.
A Registered dealer having a Valid TIN (Business Identification Number) is considered as a Registered Dealer. The dealer needs to charge VAT in the sales invoices and is allowed to avail Input VAT Credit paid on the purchases made. This credit can be utilised for setting off the output VAT payable by the dealer for the return period.
As mentioned earlier, VAT is applicable, both on Goods and Services at a Standard Rate of 15%. As a result of this, any input services purchased by the dealer for rendering services to the customers, are also treated as purchases and the VAT paid on such services are also eligible for Input Tax credit.
The Registered dealer needs to issue a Tax Invoice (Challan Patra) displaying the amount of VAT charged on the sales made to any other registered dealer. The Tax invoice needs to be printed in the prescribed format of MUSAK-11 as specified by the Department. In Tally.ERP 9, all the sales voucher type marked as Tax Invoice can be printed in the prescribed format of MUSAK-11 by default. Alternatively, dealers can use the default sales invoice format of Tally.ERP 9 by setting the options as per requirement in the F12: Print Configuration settings of the Sales Invoice.
The sales when made to unregistered dealers or consumers, the VAT chargeable on the same need not be disclosed separately in the Sales Invoice. For such sales, Retail Invoices must be issued. The Retail invoice sale price can be inclusive of all taxes and any VAT paid based on the Retail Invoice cannot be claimed as Input Tax credit by the purchasing dealer. The Retail invoices also need to be printed in the Prescribed Format of MUSAK–11A. By default, the Sales Voucher Type in Tally.ERP 9 will be printed as a Retail Invoice, provided no changes are made in the F12: Print Configuration settings of the Sales invoice. If the dealer wishes to print the Retail invoice in default format as provided by Tally.ERP 9, it can be configured in F12: Print Configuration settings accordingly.
All the Sales/Purchase related adjustments like Returns, escalations or de-escalations in prices are to be accounted for in Prescribed formats as provided by the Department. Tally.ERP 9 provides all such Prescribed formats for Debit Notes and Credit Notes by default. The Credit Notes are to be printed in the format of MUSAK–12. The Debit Notes needs to be printed in MUSAK–12A format. (Presently, these formats are supported for Sales/Purchase Returns only).
The periodical Returns are to be filed with the department within a period of 10 days from the end of the relevant return period. All the returns are to be filed with the Department along with the dues payable, derived as per the VAT summary of sales and purchase transactions on a monthly basis.
The Summary of Total VAT liability on the sales made during the return period, the VAT paid on the purchase of goods & services and the NET VAT liability for the return period is recorded in Form MUSAK–19. Along with MUSAK–19, the following supporting annexures are also to be filed.
MUSAK–16: Register for Accounts for Purchases
MUSAK–17: Register for Accounts for Sales and
MUSAK–18: Account Current.
MUSAK–16 provides the list of purchase of all goods and services on which VAT is paid and is eligible for Input tax credit. It shows the supplementary Duty and VAT paid on each item separately (presently, only the VAT paid is shown separately as the supplementary duty paid on purchases will form a part of purchase cost).
MUSAK–17 provides the list comprising of, the sale of all goods and services on which VAT is charged and is payable to the department as liability. It shows the supplementary Duty and VAT paid on each item separately.
MUSAK–18 is a current Account. It displays the status of VAT in the form of current account. It displays the opening balance of input tax credit if any and gives an account of tax credit and tax liability of the dealer during the return period. Along with this, it also records the payments made, during the return period or at the time of filing of returns.
The procedure to be followed for using the VAT Functionality to capture the value of transactions in the aforesaid Return and the Annexures is explained in the following pages.
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