This document discusses Value Added Tax (VAT) calculations in Bangladesh and provides three example problems: 1. It outlines the steps to calculate the VAT base and VAT amount for a manufacturing company, including costs of raw materials, labor, overhead, expenses, and profit margin. 2. It presents a multi-stage supply chain involving import, manufacturing, wholesale, and retail and asks to calculate VAT at each stage. 3. It provides information on an imported good including customs fees, duties, and insurance and asks to calculate the total VAT.

1. Value Added Tax (VAT)
---Part two

2. •Assessable Value/ Transaction Value: (C&F value X
Conversion rate) + Insurance Cost + Landing Charge (Now
determined by PSI Companies)
•Infrastructure Development Surcharge (IDSC): (Assessable
value X IDSC)
•Custom Duty: (Assessable value including IDSC X Custom
duty)= Duty paid value
Valuation of the Base
VAT

3. •Supplementary Duty: (Duty paid value X SD)
•VAT =( AV+IDSC+CD+SD except advance income tax) X VAT
rate
•Advance income tax : (AV X tax rate) (not to be considered for
charge of any other duty and VAT)
Valuation of the Base
VAT

4. C & F Value 100
Insurance cost & Landing cost (1% of C&F and I value)
IDSC (4% of AV)
Custom duty (37.5%)
Supplementary duty (25% of duty paid value)
VAT able base VAT @ 15%
Let’s Do It!
VAT

5. Problem 1
The following information has been taken from the accounting records of
XYZ Bangladesh Limited for the year 2013:
Raw Materials inventory, January 1 Tk. 45,000
Raw Materials inventory, December 31 Tk. 30,000
Work In Process inventory, January 1 Tk. 90,000
Work In Process inventory, December 31 Tk. 50,000
Finished Goods inventory, January 1 Tk. 130,000
Finished Goods inventory, December 31 Tk. 105,000
Purchase of Raw Materials Tk. 375,000
Direct labor Tk. 75,000
Manufacturing Overhead Tk. 320,000
Selling Expenses Tk. 70,000
Administrative Expenses Tk. 135,000
The company sells its product by adding 20% profit on cost. Determine the
amount of VAT if the rate is 15%.

6. Problem 2
On January, 2014, ABC Limited imported raw materials of readymade
garments for Tk. 150,000 and sold it to Vertex Fashions for Tk. 200,000.
Using these materials, Vertex Fashions made 250 pieces of shirts and
sold it to Naz Fashion House, a wholesaler, for Tk. 250,000. Naz Fashion
House sold the shirts to a retail seller Banglar Mela for Tk. 300,000.
Banglar Mela sold all the shirts to various customers for Tk. 350,000. In
each stage 15% VAT is to be considered. Compute VAT in each case.

7. Problem 3
Mr. Sumon, an importer, imported chemicals of Tk. 200,000 (C&F value
determined by the Bangladesh Customs Authority). The insurance
charge is 1% of the C&F value, borne by the importer. Thereafter, 1.5%
landing charge is applicable on these goods. Customs duty and
supplementary duty rate are 10% and 15% respectively. Calculate the
amount of VAT, assuming a rate of 15%.