Vat Act 1991- Rules & Compliance At MJL Bangladesh Limited

Abstract

Value Added Tax or VAT was introduced in Bangladesh in 1991, replacing the then in effect sales tax. VAT was introduced in Bangladesh with the aim greater revenue generation for the government and stimulating economic growth in the country. The set of laws that guide the scope of VAT, Turnover Tax and Supplementary Duty in Bangladesh is known as VAT Act 1991. The VAT Act 1991 contains over 70 laws that guide a business in VAT related issues, from registration to penalties of non-compliance; it also dictates the structure of the VAT authority and the power they may exert upon businesses regarding the three taxes within the realm of the Act if situation demands. MJL Bangladesh Limited is the one of the biggest names in the lubricant market of Bangladesh. With a market share of over 30%, MJL Bangladesh Limited is the market leader in the lubricant industry of Bangladesh and a sincere tax payer. In the financial year 2010-2011 MJL Bangladesh Limited had paid Tk. 456,547,603 in VAT just for one of its warehouses. The following report discusses certain selected laws of the VAT Act 1991 and MJL Bangladesh Limited’s stance interms of compliance. The report concludes with some suggestions that might help MJL Bangladesh Limited comply with VAT Act 1991 in a better manner.