General Tariff Interpretation
1. Customs Duty (CD): Customs duties are charged under the Customs Act, 1969 [Reference: First Schedule of Bangladesh Customs Tariff (BCT 20 14)]. The Customs authority of NBR grants some special exemptions on the statutory rate for certain sectors through Statutory Regulatory Orders (SRO) and order.
2. Regulatory Duty (RD): Regulatory Duty is levied on at a flat rate of 5% of assessable value for those items where SRD-CD is 25% [SRO No. 182-Law/2014/2520/Customs, dated 0 1-07-2014 (al125% & some special case where CD Rates 10%)]. In some selected HSCode & sector RD are exempted by same SRO.
3. Value Added Tax (VAT): VAT is imposed by VAT act 22 of 1991 at a flat rate 15% of "duty paid value" (assessable value plu s customs duty plu s regulatory duty plus supplementary duty). In some case VAT is exempted by NBR-VAT authority. [Reference: for general exemption given by SRO No. 106-Law/20 14/70 1-VAT, Table-1 (Import stage & Import and Domestic stage), dated 05-06-2014. Also exemption of VAT in different sector by different SRO & Order issued by VAT authority ofNBR .]
4. Supplementary Duty (SD): SD is levied on items listed under the VAT Act, 1991. The rate depends on the product. The VAT authority also issues exemptions on SD through the SROs [for general exemption given by SRO No. 109-Law/2014/704-VAT, Table-1 (Import Stage), dated 05-06-2014, also exemption of SD in different sector by different SRO & Order issued by VAT & Customs authority ofNBR]. SD is levied on the basis of duty paid value (assessable value plus customs duty plus regulatory duty).
5. Advance Income Tax (AIT): The AIT is levied under Rule 17A of Income Tax Ordinance, 1984 at a flat rate of 5% on assessable value. Some exemptions are given via SRO No. 251-Law/Income Tax/20 12, Dated 01-07-2012.
6. Advance Trade VAT (ATV): ATV is applied only on commercial imports under "Bidhi Mala-2012" by SRO No . 242-Law/2012/659-VAT dated 28-06-20 12 by Section 22, 5 (2), 6 (4) and 31 of VAT act 1991. ATV is levied at a flat rate of 4% on "VAT paid value" ([assessable value plus customs duty plus regulatory duty plus effective SD] with 26.67% value addition).
7. TTl (Total Tax Incidence)
How can calculate Total Tax Incidence (TTl)
AV (Assess Value)= 100Tk
Calculate ESD (Effective Supplementary Duty) = (1OO+CD+RD) x SD/100 Calculate EVAT (Effective Value Added Tax) = (lOO+CD+RD+ESD) x VAT/100
Calculate EATV (Effective Advance Trade Vat) = (100+CD+RD+ESD) x 1.2667 x ATV/100
Then we can Calculate Total Tax Incidence (TTl)= CD+RD+ESD+EVAT+EATV + AIT