A product’s price tag must show the final price including VAT, according to a recent order issued by the National Board of Revenue’s (NBR) VAT department. The order states that the VAT amount cannot be excluded from the price and added separately at the time of payment. However, the breakdown of the base price, VAT, and any other supplementary duty should be shown separately. This will help customers to understand the final amount that they need to pay for a product.
The order also mentions that prices should be displayed in Bangladeshi currency. This means that all products must display their prices in taka from now on.
If a product costs BDT 100 and VAT is BDT 15%, then that means that BDT 15 will be added as VAT at the time of purchase. Many businesses show the price as simply BDT 100 and add the VAT amount at the time of purchase. But according to the new order, the price tag should now show “BDT 115” as the price in the menu card or on the price tag of the product or service. No additional VAT or duty can be added with this at the time of purchase.
In Bangladesh, the standard VAT rate of 15% applies to all businesses and industrial units having an annual turnover of BDT 2 million or more. But other rates, such as 10%, 7.5%, 5%, and 2%, are also applicable depending on the goods or service being provided. On the other hand, supplementary duties, in excess of the 15% standard VAT rate, are also applicable in the purchase of some specified products or services.