In the VAT Act, various products or services are given “VAT Exempted” in three ways; namely-
1. Exemption by Schedule:
The goods mentioned in the first part of the first schedule and the services mentioned in the second part are exempt from VAT.
In addition, all products mentioned in the Second Schedule of the Narcotic Drugs Control Act, 2018 are exempt from VAT when manufactured or produced in Bangladesh.
2. Exemption by notification:
The power given in Section 126(1) states that the Government may, by notification, exempt any goods or services subject to certain conditions.
Presently through SRO – 141 (June 03, 2021) several goods are exempted from import, production and trade and on supply of certain services.
3. Exemption by special order:Section 126(2); For the implementation of international agreements or bilateral agreements on a reciprocal basis, the Board may grant exemption from VAT and supplementary duties on the supply of any goods or services and through section 126(3) the Board may exempt any goods or services from VAT and supplementary duties.
