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The National Board of Revenue is set to raise the adjustment limit on payable valueadded tax on positive balances in current accounts maintained by businesses with it to expedite the clearing of additional balances.
The limit may be increased to 30 per cent from the existing 10 per cent so that manufacturers and traders can use up the additional balances faster, VAT officials said.
They said that the businesses had been demanding refunds or increase in the adjustment limit as they had a huge amount of money stuck on the accounts.
The businesses were previously required to maintain a current account register, popularly known as mushak-18, with the respective VAT offices under the now defunct VAT Act-1991.
The VAT offices previously did not allow the businesses to supply goods from their factories or warehouses unless they paid VAT in advance to keep balances on the accounts positive.
The revenue board abolished the provision for maintaining the accounts in the new VAT and Supplementary Duty Act-2012 which came into effect in July 2019.
More than Tk 2,000 crore is still stuck in the accounts as the revenue board did not refund the money in cash.
The amount will be much higher if balances maintained by traders who are in dispute with the tax authorities are taken into consideration.
The NBR has rather kept a provision in the VAT and SD Rules2016 allowing the businesses to adjust the highest 10 per cent of payable input tax with VAT returns submitted every month.
The NBR’s VAT wing sought the opinion of its field-level offices after many manufacturers filed applications in this regard.
The NBR has decided to raise the limit based on these opinions, said a senior official said.
It will help the businesses to exhaust their additional balances faster and increase the flow of funds for business activities, he said.
He said that the proposal for amending the VAT rules allowing a higher rate of adjustment had been sent to the law ministry for vetting.
The NBR will issue a Gazette notice after the vetting process is complete, he added.
