VAT refund process for superstores simplified

The National Board of Revenue (NBR) has simplified the VAT (Value added tax) refund process for the superstore businesses by waiving the requirement to furnish details on the use of raw materials.

Usually, manufacturers are supposed to submit 'input-output coefficient' to the VAT officials showing how much of the imported raw materials is used to manufacture a finished product.

The provision was also applicable for super shop owners too. Under the provisions, the super shop owners have to submit a declaration form to claim rebate.

The process is cumbersome as many of the businesses alleged use of discretionary power of the VAT officials to accept the coefficient and allow refund of paid VAT on procurement of raw materials. In case of super shops, such provision is meaningless as they do not have manufacturing units.

Recently, the NBR increased VAT on super shop businesses to 7.5 per cent from 5.0 per cent.

VAT policy wing of NBR, on Tuesday, sent letters to all field-level VAT offices asking them not to demand the coefficient declaration from super shop owners.

In the letter, the NBR also made it clear that no super shop can claim VAT to the consumers and they have to sell products in VAT inclusive prices following Maximum Retail Price.

Talking to the FE, VAT policy wing second secretary Barrister Bodruzaman Munshi said super shops can choose any VAT plan, either 7.5 per cent or 15 per cent.

In case of 7.5 per cent VAT, super shops will not be able to claim VAT rebate while 15 per cent is the standard rate that could be adjusted with the payable VAT.

"Our aim is to make the system simple so that super store owners can be inspired for expansion," he said.

doulotakter11@gmail.com