The document provides an overview of VAT accounting systems in Bangladesh. It discusses key aspects of VAT accounting including why VAT is paid, who pays VAT, what VAT is, maintaining proper accounting records, inventory management registers, VAT and turnover tax invoices, withholding certificates, credit and debit notes, input-output coefficients, and the responsibilities of taxpayers. The goal is to educate taxpayers on proper VAT accounting procedures and compliance with VAT laws and regulations in Bangladesh.

1. VAT Accounting System
under VAT & SD Act 2012
A.K.M. Mahbubur Rahman
Director General
Customs Excise & VAT Training Academy
Chattogram

2. VAT Accounting System 2
Why Pay VAT
g~mK w`e R‡b R‡b
Ask wbe Dbœq‡b
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3. VAT Accounting System 3
Why Pay VAT
VAT
Economic
Prosperity
Broaden
Social
Security
Creating
New Jobs
Reducing
Poverty
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4. Ordinary Citizen Business Entities
• Pay VAT against their
purchases from Businesses
• Collecting VAT on behalf of government
from consumers/buyers
• Business Identification Number (BIN)
holder
• Deducting VAT from suppliers as
withholding entity
VAT Accounting System 4
Who Pays VAT
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5. 5
What is VAT?
A VAT is a broad-based tax on supply, with systematic
crediting of tax paid on inputs
What are the basic features of VAT?
Broad based consumption tax
Applied on goods, service and immovable
Invoice based
Broad based offset/crediting
Destination or Origin principle
Easy to collect
Regressive

6. VAT Accounting System 6
What is Accounting
 Accounting is the systematic and comprehensive recording of financial
transactions pertaining to a business.
 The process of summarizing, analyzing and reporting these transactions to
oversight agencies and tax collection entities.
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7. VAT Accounting System 7
Accounting Records
Accounting Records mean: all documents and books used in the preparation of the tax return and all
financial statements, including general ledger, subsidiary ledgers, sales slips, and invoices.
Under the VAT and Supplementary Duty Act, 2012 "document" would mean to include the followings:
 anything expressed or stated with the help of letters, numbers, symbols or signs on paper or any
other like material; and
 any electronic data, computer programme, computer tape, computer disk, or any other similar
device that can hold data.
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8. VAT Accounting System 8
Basics of VAT Accounting
Accounting Records are to be maintained by the registered persons
under the provisions of Value Added Tax and Supplementary Duty Act,
2012
 Section 51 – 54 of VAT Act
 Rule 40 – 44 of VAT Rules
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9. 8/21/2020VAT Accounting System 9
VAT Accounting vs. Business Accounting
VAT Accounts Business Accounts
Single Entry, journal/ledger based Double Entry, accounting equation based
(Asset = Liability + Equity)

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Inventory Management Registers
 Rule 40 (1) (ka) & 41 (ka): For maintaining all accounts of PURCHASES: Form
6.1
 Rule 40 (1) (kha) & 41 (ka): For maintaining all accounts of SALES: Form 6.2
 Applicable for both VAT and Turnover operations
 No need to maintain form Mushok 6.1 if no processing is involved (trading
only)

11. 8/21/2020VAT Accounting System 11
Inventory Management Registers (Contd…)

12. VAT Accounting System 12
Inventory Management Registers (Contd…)
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13. 8/21/2020VAT Accounting System 13
Inventory Management Registers (Contd…)
 Any sale or purchase transaction beyond BDT 200,000 needs to be recorded and
submitted to iVAS using Form 6.10
 Information to be submitted electronically before or during submission of
Returns
 Hardcopy submission to commissioner is also acceptable if incapable of
electronic submission
 Exception: Taxpayers using NBR approved PoS, ECR, or any other computer
system
Rule 42

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Inventory Management Registers (Contd…)

15. 8/21/2020VAT Accounting System 15
Inventory Management Registers (Contd…)
Mushok 6.10

16. 8/21/2020VAT Accounting System 16
Inventory Management Registers (Contd…)
Mushok 6.10

17. 8/21/2020VAT Accounting System 17
VAT & Turnover Invoices
Invoices/Certificates are issued
Under Section 51 – 54 of VAT Act
Under Rule 40 – 41 of VAT Rules
Against sale/transfer of goods & services (supply): Mushok – 6.3, 6.4, 6.5 & 6.9
(turnover tax)
VAT deduction by withholding entities (certificate): Mushok – 6.6
Adjustment of excess/less paid VAT Credit/Debit Note: Mushok – 6.7 & 6.8

18. 8/21/2020VAT Accounting System 18
VAT Invoice Features
 Issued against each supply on or before the date on which VAT is due.
 Fiscal year based & in sequential order
 For operations from multiple locations, invoice needs to be issued separately
for each location using separate serial number
 Issued in two copies – one for buyer one for record
 In case of withholding, invoice will be treated as integrated tax invoice and
certificate of deduction at source

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VAT Invoice
Mushok 6.3

20. 8/21/2020VAT Accounting System 20
VAT Invoice (Contd…)
Mushok 6.3

21. 8/21/2020VAT Accounting System 21
VAT Invoice (Contd…)
Mushok 6.3

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Invoice for Contract Manufacturing
 Movements of Inputs and final products between the contracting parties are
to be made through Mushok 6.4.
 Fiscal year based & in sequential order
 For operations from multiple locations, invoice needs to be issued separately
for each location using separate serial number
 Issued in two copies – one for contractor one for record
 Manufacturer to issue Mushok 6.3 after supply to the original owner of
goods

23. 8/21/2020VAT Accounting System 23
Mushok 6.4
Invoice for Contract Manufacturing (Contd…)

24. 8/21/2020VAT Accounting System 24
Mushok 6.4
Invoice for Contract Manufacturing (Contd…)

25. 8/21/2020VAT Accounting System 25
Mushok 6.4
Invoice for Contract Manufacturing (Contd…)

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Invoice for Transfers
 Movements of Inputs and final products one branch to another branch including
warehouse are to be made through Mushok 6.5
 Fiscal year based & in sequential order
 For operations from multiple locations, invoice needs to be issued separately for
each location using separate serial number
 Issued in two copies – one for recipient branch/warehouse & one for record

27. 8/21/2020VAT Accounting System 27
Mushok 6.5
Invoice for Transfers (Contd…)

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Turnover Tax Invoice Features
 Issued against each supply
 Fiscal year based & in sequential order
 For operations from multiple locations, invoice needs to be issued separately
for each location using separate serial number
 Issued in two copies – one for buyer one for record

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Turnover Tax Invoices
Mushok 6.9

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Turnover Tax Invoices
(Contd…)
Mushok 6.9

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Turnover Tax Invoices
(Contd…)
Mushok 6.9

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Withholding Certificates
 Supply to the withholding entities be made against Mushok 6.3
 Withholding entities to issue Withholding certificate in Mushok 6.6 within three
working days from payment to the supplier
 VAT deducted at source shall be deposited to treasury in favour of the VAT
Commissioner in whose jurisdiction supplier is registered
 One Certificate may be issued against multiple Mushok 6.3

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Withholding Certificate
(Contd…)
Mushok 6.6

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Withholding Certificate
(Contd…)
Mushok 6.6

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Withholding Certificate
(Contd…)
Mushok 6.6

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Credit Notes
 Credit notes are issued by the supplier when the value of a supply is reduced
after a tax invoice was issued.
 Credit notes are issued to correct a genuine mistake or to give a proper credit
under certain situations, such as:
 goods are returned by the customer;
 the nature of supply of goods or services is fundamentally changed;
 excess amount of tax is shown in the tax invoice than the actual payable amount of
tax.

37. 8/21/2020VAT Accounting System 37
Credit Note
Mushok 6.7

38. 8/21/2020VAT Accounting System 38
Debit Notes
 Debit notes are issued by the supplier when the value of the supply is increased
after a tax invoice was issued.
 These notes are issued to correct a genuine mistake or to give a proper debit
under certain situations, such as:
 additional charges such as transportation cost imposed after delivery of goods;
 when goods delivered to the customer are under-priced;
 over supply of goods or services to the customer;
 less amount of tax is shown in the tax invoice than the actual payable amount of tax.

39. 8/21/2020VAT Accounting System 39
Debit Note
Mushok 6.8

40. Input-output Co-efficient
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41. Input-output Co-efficient (cont..)
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42. Goods
Importer/
Exporter
Manufacturer/
Supplier
Retailer/
Whole Seller
Services
Service
Renderers
• Mushak 6.1
• Mushak 6.2
• Mushak 6.10
• Invoice
• Treasury Chalan
• Mushak 9.1
Circle
(RO & ARO
• Mushak 6.1
• Mushak 6.2
• Mushak 6.10
• Invoice
• Treasury Chalan
• Mushak 9.1
Division
(AC/DC)
RO & ARO
Comm
ADC, JC,DC,AC
RO & ARO
• Mushak 6.1
• Mushak 6.2
• Mushak 6.10
• Invoice
• Treasury Chalan
• Mushak 9.1
• Mushak 6.1
• Mushak 6.2
• Mushak 6.10
• Invoice
• Treasury Chalan
• Mushak 9.1
Registration
Mushak 2.1
Input-output
Co-efficient
Mushak 4.3
• Issuing Invoice (Mushak 6.3)
• Keeping Purchase records (Mushak 6.1)
• Keeping Sales Records (Mushak 6.2)
• Updating (Mushak 6.10
• Declaring Co-efficient (Mushak 4.3)
• Preparation of Return (Mushak 9.1)
• Depositing Treasury Challan
• Filing Return
• Stock Management
• Internal Audit
Any
Data/Docs
T Challan
Return
Mushak 9.1
iVAS

43. 1. Get registered or enlisted
2. Receive Invoices of business purchases
3. Keeping records on actual price
4. Issue sale invoices
5. Follow standard accounting
6. Maintain books of accounts
7. Use BIN in all documents
8. Deduct withholding VAT
9. Pay VAT on time
10. Send VAT documents to iVAS system or VAT office
11. Preserve Documents for specified period
12. Submit Return on time
13. Assist VAT Audit
14. Inform VAT authority of any changes to the business
What are the responsibilities of a Taxpayer?
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