CHAPTER 9 SUPPLEMENTARY DUTY 1. Imposition of supplementary duty and person liable.

Imposition of supplementary duty (1) Supplementary duty is imposed and payable on (a) (b) (c) an import of dutiable goods; a supply of dutiable goods manufactured in Bangladesh; and a supply of dutiable services in Bangladesh.

Exemption for exports (2) No supplementary duty is imposed on an import of dutiable goods if the goods are entered for export without first being entered for home-consumption. (3) No supplementary duty is imposed on a supply of dutiable goods or services if the supply is zero-rated under Part C of Chapter 6 of this Act. Single stage tax (4) Supplementary duty is payable only once in relation to particular dutiable goods or services. Amount of supplementary duty payable (5) The amount of supplementary duty payable is calculated by multiplying the dutiable value of the goods or services by the rate of supplementary duty applicable for those goods or services. Supplementary duty rate (6) The rate of supplementary duty applicable for particular dutiable goods or services is the rate specified in the Third Schedule for those goods or services. Change of rate (7) Where there is a change in the rate of supplementary duty, the rate to be applied is, (a) for an import of dutiable goods: the rate applicable at the time the duty becomes payable; or

(b)

for a supply of dutiable goods or services: the rate applicable at the time of supply.

2. is:

Person liable to pay supplementary duty. (1) The person liable to pay the supplementary duty imposed under section 1 (a) (b) (c) in the case of an import of dutiable goods: the importer; in the case of a supply of dutiable goods manufactured in Bangladesh: the manufacturer; in the case of a supply of dutiable services: the supplier.

(2) Subsection (1) does not prevent the collection of supplementary duty from a different person if that person is made separately, or jointly and severally, liable for this tax under another provision of this Act. 3. Dutiable value.

Dutiable value of imports (1) The dutiable value of an import of dutiable goods is the value of the taxable import of the goods, as determined under section Error! Reference source not found., minus the supplementary duty payable on the import. Dutiable value of supplies (2) Except as provided in subsection (3) or (4), the dutiable value of a supply of dutiable goods or services is the value of the taxable supply of the goods or services, as calculated under section Error! Reference source not found., minus the supplementary duty payable on the supply.
Example: A manufacturer sells dutiable goods that are subject to both 20% supplementary duty and 15% VAT for a total consideration of taka 138,000. This value of the supply for VAT purposes is the consideration minus the tax fraction of that consideration (138,000 18,000 = 120,000). The dutiable value of the supply is the VAT value minus the supplementary duty payable (120,000 20,000). Thus, the dutiable value is taka 100,000. In practice, manufacturers will work this out in reverse, as follows. The manufacturer wishes to charge a price of taka 100,000 before any taxes are applied. The 20% supplementary duty is added first (100,000 + 20,000) to get to the value on which VAT should be applied. The VAT is added last (120,000 + 18,000) to get to the total consideration that must be charged to the customer.

(3) The dutiable value of a supply of dutiable goods or services for no consideration, or for inadequate consideration, is the fair market value of the supply. (4) The dutiable value of a supply of dutiable goods or services to which a special scheme applies, is the value specified by the Board in respect of that supply.

4.

Special schemes for tobacco and alcohol.

(1) The Board may impose a special scheme for the payment of supplementary duty on a supply of dutiable goods manufactured in Bangladesh if the goods are: (a) (b) cigarettes, tobacco, or similar products, including blended products; or alcoholic beverages, ingredients for alcoholic beverages, or similar products.

(2) A special scheme imposed by the Board under this section shall include provisions: (a) (b) (c) requiring the manufacturer to print a maximum retail price on the goods; setting the minimum level at which that maximum retail price should be set; and specifying that: (i) the value of the goods for the purposes of calculating VAT is equal to the maximum retail price printed on the goods, minus the tax fraction of that amount; and the dutiable value of the goods is the value determined under subparagraph (i), minus the supplementary duty payable by the manufacturer.

(ii)

Note: This means that the price is quoted inclusive of both VAT and supplementary duty.

(3) A special scheme imposed by the Board under this section may, in addition to the matters referred to in subsection (2), include provisions requiring the manufacturer to affix on or to the body of the package, pot, bottle, or other container a stamp, banderol, or special sign or mark of a particular size and design, manifesting measures of security and for that purpose the Board may determine all procedures relating to scheme, including in relation to the use, distribution, preservation, supervision, observation, accounting, and packaging of stamps, banderols, or special signs or marks. (4) A supply of dutiable goods which are subject to a special scheme imposed by the Board under this section is zero-rated for the purposes of the VAT imposed under this Act if: (a) (b) the supplier is a person other than the manufacturer of the goods; the goods are supplied in the packaging on which the manufacturer printed the maximum retail price;

(c)

the goods have not been opened, subdivided, or removed from the packaging on which the maximum retail price was marked and have not been mixed or blended with other products or otherwise altered in any way since they were supplied by the manufacturer; and if the goods are required to be sold with a stamp, banderol, or special sign or mark, that stamp, banderol, or special sign or mark is on the goods at the time of supply.

(d)

Note: The supply by the manufacturer will not be zero-rated. Under the scheme, the manufacturer will charge both VAT and supplementary duty on the basis of retail prices. No input tax credits are allowed for VAT charged on dutiable goods subject to a special scheme established under this section: section Error! Reference source not found.(4)(e).

5.

Payment and collection of supplementary duty on imports.

(1) The supplementary duty imposed on an import of dutiable goods shall be paid by the importer at the same time, and in the same manner and mode, as the VAT imposed on the import of the goods.
Note: Section Error! Reference source not found. thus applies both for VAT and supplementary duty.

(2) The liability to pay supplementary duty arises by operation of this section and does not depend on the making of an assessment of the supplementary duty payable by the Commissioner of Customs. (3) All powers and duties conferred on or granted to the Commissioner of Customs under this Act in relation to VAT imposed on imports are also conferred and granted in relation to the supplementary duty imposed on imports under this Chapter. 6. Payment and collection of supplementary duty on supplies.

When supplementary duty becomes payable (1) Supplementary duty imposed on a supply of dutiable goods or services becomes payable at the same time that VAT becomes payable on the supply.
Note: Section Error! Reference source not found. thus applies both for VAT and supplementary duty.

(2) The liability to pay supplementary duty arises by operation of this section and does not depend on the making of an assessment of the supplementary duty payable by the Commissioner.

Accounting for and paying supplementary duty (3) The supplementary duty imposed on (a) a supply, by the manufacturer, of dutiable goods manufactured in Bangladesh: must be accounted for and paid by the manufacturer at the same time, and in the same manner and mode, as the output tax payable on the taxable supply of the goods; a supply of dutiable services in Bangladesh: must be accounted for and paid by the supplier at the same time, and in the same manner and mode, as the output tax payable on the taxable supply of the services.

(b)

Note: Section Error! Reference source not found. thus applies both for VAT and supplementary duty.

(4) All powers and duties conferred on or granted to the Commissioner under this Act in relation to VAT are also conferred and granted in relation to the supplementary duty imposed under this Chapter. Returns (5) A person who is liable for supplementary duty shall file a return for each tax period under and in accordance with the requirements of Chapter 11. (6) 7. The VAT return shall also be a supplementary duty return.

Deemed supply of dutiable goods.

(1) If a person who manufactures dutiable goods cannot, to the satisfaction of the Commissioner, account for a quantity of dutiable goods manufactured by the person in Bangladesh, the person is deemed to have supplied the goods for their fair market value. (2) However, no supplementary duty shall be imposed if the goods (a) (b) are destroyed by fire or other natural causes; or have deteriorated, or been damaged, and have been disposed of without being supplied to another person.

8.

Decreasing adjustments for supplementary duty paid.

Preconditions (1) No entitlement of a person under this section to a decreasing adjustment for supplementary duty paid may be exercised without prior approval from the Commissioner.

(2) The person must apply to the Commissioner, in the mode and manner prescribed and providing the information required, for permission to make the decreasing adjustment. (3) If the Commissioner is satisfied that part or all of the decreasing adjustment should be allowed, the Commissioner shall, by notice in writing, inform the applicant that the adjustment has been allowed, the amount of the adjustment, and the tax period in which it may be claimed. (4) The Commissioner must respond to an application under this section within 30 (thirty) days of its receipt. When decreasing adjustments are allowed (5) The decreasing adjustment is allowed in the tax period specified in the notice issued by the Commissioner. Overpayments (6) A person who has paid supplementary duty that exceeds the amount payable under this Act is entitled to a decreasing adjustment equal to the amount of the excess. (7) An application for the decreasing adjustment must be made within 6 (six) months from the end of the tax period in which the duty was overpaid. Raw materials (8) A manufacturer who uses dutiable goods as raw materials in the manufacture of other dutiable goods in Bangladesh, is entitled to a decreasing adjustment for the supplementary duty, if any, (a) (b) paid by the manufacturer in respect of the import of those raw materials; or that the Commissioner is satisfied was paid by a person who supplied those raw materials to the manufacturer.

(9) An application for the decreasing adjustment must be made within 6 (six) months from the date on which the dutiable goods were used as raw materials in the manufacture of other dutiable goods. Decreasing adjustment for supplementary duty paid on exports (10) A person who imported dutiable goods is entitled to a decreasing adjustment for the supplementary duty paid by the person on the import if the goods are in compliance with the conditions for payment of a drawback of duties under the Customs Act.

(11) An application for the decreasing adjustment must be made within 6 (six) months from the date on which the goods are exported or put on board a ship or aircraft in which they are exported and must be accompanied by such evidence as is prescribed by the Board to show that the duty was paid and that the goods were exported.