Now VAT returns can be filed without late fees

Businesses can now file VAT (value-added tax) returns without late fees during natural disasters or epidemics, as the government has waived all fines or interests in case of failure to pay the returns on time.

For adding provisions of extending time, an amendment to the Value Added Tax and Supplementary Duty Act, 2012, which earlier had no scope of extension of time, has been made. President Abdul Hamid on Wednesday promulgated two separate ordinances empowering the National Board of Revenue (NBR) to extend time for submission of VAT returns and income tax returns with waiving penalty and interest on applicable taxes.

Of the two, the ordinance for the VAT law has been given retrospective effect from April 1, 2020. Two new sub-sections have also been added to section 64 (1) of Value Added Tax and Supplementary Duty Act, 2012.

According to sub-section (a), “…during natural calamities, epidemics and state of emergencies, the NBR will be able to extend the deadline” for VAT return submissions without levying penalties.

There was an obligation under the VAT law to file the VAT returns for every month within the 15th day of the next month. Businesses had to pay Tk 10,000 as late fee for failure to submit the VAT returns online within the deadline.

After the amendment, NBR, with prior approval of the government, has got authority to extend timeframe for the submission of VAT returns without penalty.

Until May 15, NBR had received 42,600 VAT returns on the basis of business transaction in the month of April – up by more than 11,000 or 34.82 percent compared to the returns submitted in March. The returns for April fetched revenues worth Tk3,879 crore, up by Tk700 crore or 22 percent from the revenues earned in March.