Changes by SROs

*SRO No. 255-AIN/IT/2017, date-01 August 2017 [validate for the A/Y 2017-18]: Tax rate on export income
has been reduced for the assessee engages in the production and export of Knitwear and Oven Garments,
as follows –
Types of Assessee Tax Rate Condition
Company 12%
o If available internationally acceptable green building
certification for Factory in the concern income year
Company 10%
o Applicable only for export income of the concern factory’s
production
Other than Company Max. 12%

*SRO No. 256-AIN/IT/2017, date-01 August 2017 [validity: 01 July 2017 to 30 June 2018]: TDS rate has been
reduced to 0.70% for export value of goods mentioned u/s - 53BB & 53BBBB, except Jute Goods.

*SRO No. 257- AIN/IT/2017, date-01 August 2017: Substitution of Rule – 16 [Deduction of tax from
payment to contractors, etc.] – Previous year’s Table A & B are merged with non –effect in Table C
The rate of deduction of income tax u/s-52 shall be the following-
(a) Subject to clause (b), in case of a payment made under sub-section (1) of section 52, the deduction on
payment shall be at the rate specified in the Table-1 below-
[Section 52(1): Where any payment is to be made by a specified person to a resident on account of-
o Execution of a contract, other than a contract for providing or rendering a service mentioned in
any other section of Chapter-VII [Payment of Tax before Assessment]
o Supply of goods
o Manufacture, process or conversion
o Printing, packing or binding
The person responsible for making the payment shall, at the time of making such payment, deduct tax at
such rate, not exceeding 10% of the base amount, as may be prescribed.]

Table -1 [For execution of contract (Example-Construction, Machinery Installation, Repair & Maintenance,
etc.), Supply of Goods, Manufacture/Process/Conversion, Printing/Packing/Binding]
Sl. Limit of Base Amount Rate (TDS): 2017-18
1 Up to Taka 15 lakh 2%
2 > 15 lakh to 25 lakh 3%
3 > 25 lakh to 01 crore 4%
4 > 01 crore to 05 crore 5%
5 > 05 crore to 10 crore 6%
6 > 10 crore 7%
(b) The rate of deduction from the following classes of persons shall be at the rate specified in the Table-2
Below-
Table -2
Sl. Limit of Base Amount Rate (TDS): 2017-18
In case of oil supplied by oil marketing companies –
1 (a)Where the payment does not exceed taka 2 lakh - Nil
(b) Where the payment exceeds taka 2 lakh-0.60%
2 In case of oil supplied by dealer or agent (excluding petrol pump
1%
station) of oil marketing companies, on any amount
3 In case of supply of oil by any company engaged in oil refinery, on any
3%
amount
4 In case of company engaged in gas transmission, on any amount 3%
5 In case of company engaged in gas distribution, on any amount 3%
Provided that -
(a) The rate of tax shall 50% higher, if the payee does not have a 12 digits TIN at the time of making the
payment;
(b) Where the payee or the income of the payee, which is subject to tax at source u/s-52, is exempted from
tax or is subject to a reduced tax rate in an income year, the Board may on an application made by the
payee in this behalf gives a certificate in writing that the payment referred to S-52 for that income year
shall be made without any deduction or with deduction at a proportionately reduced rate, as the case may
be.

Summary of Section 52 & Rule-16 by FA 2016:

Table -A [For execution of contract (Example-Construction, Machinery Installation, Repair & Maintenance,
etc.]
Sl. Limit of Base Amount Rate (TDS): 2016-17
1 Up to Taka 2 lakh Nil
2 > 2 lakh to 5 lakh 1%
3 > 5 lakh to 10 lakh 2%
4 > 10 lakh to 25 lakh 3%
5 > 25 lakh to 1 crore 4%
6 > 1 crore to 5 crore 5%
7 > 5 crore to 10 crore 6%
8 > 10 crore 7%
Table –B [For Supply of Goods, Manufacture/Process/Conversion, Printing/Packing/Binding]
Sl. Limit of Base Amount Rate (TDS): 2016-17
1 Up to Taka 20 lakh 3%
2 > 20 lakh to 1 crore 4%
3 > 1 crore 5%

Table –C [For Supply/Transmission/Distribution of Oil, Gas etc.]

Sl. Limit of Base Amount Rate (TDS): 2016-17
In case of oil supplied by oil marketing companies –
1 (a) Where the payment does not exceed taka 2 lakh - Nil
(b) Where the payment exceeds taka 2 lakh-0.60%
2 In case of oil supplied by dealer or agent (excluding petrol pump
1%
station) of oil marketing companies, on any amount
3 In case of supply of oil by any company engaged in oil refinery, on any
3%
amount
4 In case of company engaged in gas transmission, on any amount 3%
5 In case of company engaged in gas distribution, on any amount 3%
Provided that -
(a) The rate of tax shall 50% higher, if the payee does not have a 12 digits TIN at the time of making the
payment;
(b) Where the payee or the income of the payee, which is subject to tax at source u/s-52, is exempted from
tax or is subject to a reduced tax rate in an income year, the Board may on an application made by the
payee in this behalf gives a certificate in writing that the payment referred to S-52 for that income year
shall be made without any deduction or with deduction at a proportionately reduced rate, as the case may
be.

*SRO No. 257- AIN/IT/2017, date-01 August 2017: Substitution of Rule-17A [Collection of Tax from
Importers]
For the purpose of making collection of tax u/s-53 [Collection of Tax from Importers], the Commissioner of
Customs or any appropriate officer shall collect tax in the case of any import of goods at the following rate-
(a) 5% on the value of the imported goods in case of import of goods excluding the goods mentioned in
clause (b) and clause (c)
(b) 2% on the value of the imported goods in the case of import of goods specified in Table-1 [31 items]
(c) Tk. 800/- per ton in the case of import of goods specified in Table-2 [5 items]
Provided that the collection of tax under this rule shall not apply in the case of import of goods specified in
Table-3 [212 items]
Provided further that the collection of tax under this rule shall not apply in the case of import from Bhutan
of the goods specified in Table-4 [33 items]
Provided further that where the importer or the income from import, which is subject to tax at source
under section 53, is exempted from tax or is subject to a reduced tax rate in an income year, the Board may
on an application made by the importer in this behalf gives a certificate in writing that for the said income
year no tax shall be collected under this rule or tax collected under this rule shall be at a proportionately
reduced rate, as the case may be.
Explanation: In this rule, the words “value of the imported goods” shall mean the value of the imported
goods as determined in accordance with the provisions of section 25 of the Customs Act, 1969 (Act No. IV
of 1969)

Changes in TDS/VDS Issues by FA 2017 & SRO:

*SRO No. 257- AIN/IT/2017, date-01 August 2017: Substitution of Rule – 16 [Deduction of tax from
payment to contractors, etc.] – Previous year’s Table A & B are merged with non –effect in Table C
The rate of deduction of income tax u/s-52 shall be the following-
(a) Subject to clause (b), in case of a payment made under sub-section (1) of section 52, the deduction on
payment shall be at the rate specified in the Table-1 below-
[Section 52(1): Where any payment is to be made by a specified person to a resident on account of-
o Execution of a contract, other than a contract for providing or rendering a service mentioned in
any other section of Chapter-VII [Payment of Tax before Assessment]
o Supply of goods
o Manufacture, process or conversion
o Printing, packing or binding
The person responsible for making the payment shall, at the time of making such payment, deduct tax at
such rate, not exceeding 10% of the base amount, as may be prescribed.]

Provided that -
(a) The rate of tax shall be fifty percent (50%) higher if the payee does not have the twelve-digit Taxpayer’s
Identification Number at the time of making the payment;
(b) Tax shall not be deducted in respect of clause (b) of sub-section (1) in respect of the purchase of direct
materials that constitute cost of sales or cost of goods sold of a trading company or a manufacturing
company, as the case may be;
(c) Where any imported goods on which tax has been paid at source under section 53 is supplied, tax at
source on the said supply shall be B-A, where -
A= the amount of tax paid under section 53,
B= the amount of tax applicable under this section if no tax were paid under section 53.

Table -1 [For execution of contract (Example-Construction, Machinery Installation, Repair & Maintenance,
etc.), Supply of Goods, Manufacture/Process/Conversion, Printing/Packing/Binding]
Sl. Limit of Base Amount Rate (TDS): 2017-18
1 Up to Taka 15 lakh 2%
2 > 15 lakh to 25 lakh 3%
3 > 25 lakh to 01 crore 4%
4 > 01 crore to 05 crore 5%
5 > 05 crore to 10 crore 6%
6 > 10 crore 7%
(b) The rate of deduction from the following classes of persons shall be at the rate specified in the Table-2
Below-
Table -2
Sl. Limit of Base Amount Rate (TDS): 2017-18
 In case of oil supplied by oil marketing companies –
1 (b) Where the payment does not exceed taka 2 lakh - Nil
(b) Where the payment exceeds taka 2 lakh-0.60%
2 In case of oil supplied by dealer or agent (excluding petrol pump
1%
station) of oil marketing companies, on any amount
3 In case of supply of oil by any company engaged in oil refinery, on any
3%
amount
4 In case of company engaged in gas transmission, on any amount 3%
5 In case of company engaged in gas distribution, on any amount 3%

Summary of Section 52 & Rule-16 by FA 2016:

Table -A [For execution of contract (Example-Construction, Machinery Installation, Repair & Maintenance,
etc.]
Sl. Limit of Base Amount Rate (TDS): 2016-17
1 Up to Taka 2 lakh Nil
2 > 2 lakh to 5 lakh 1%
3 > 5 lakh to 10 lakh 2%
4 > 10 lakh to 25 lakh 3%
5 > 25 lakh to 1 crore 4%
6 > 1 crore to 5 crore 5%
7 > 5 crore to 10 crore 6%
8 > 10 crore 7%
Table –B [For Supply of Goods, Manufacture/Process/Conversion, Printing/Packing/Binding]
Sl. Limit of Base Amount Rate (TDS): 2016-17
1 Up to Taka 20 lakh 3%
2 > 20 lakh to 1 crore 4%
3 > 1 crore 5%

Table –C [For Supply/Transmission/Distribution of Oil, Gas etc.]

Sl. Limit of Base Amount Rate (TDS): 2016-17
In case of oil supplied by oil marketing companies –
1 (b) Where the payment does not exceed taka 2 lakh - Nil
(b) Where the payment exceeds taka 2 lakh-0.60%
2 In case of oil supplied by dealer or agent (excluding petrol pump
1%
station) of oil marketing companies, on any amount
3 In case of supply of oil by any company engaged in oil refinery, on any
3%
amount
4 In case of company engaged in gas transmission, on any amount 3%
5 In case of company engaged in gas distribution, on any amount 3%
Provided that -
(a) The rate of tax shall 50% higher, if the payee does not have a 12 digits TIN at the time of making the
payment;
(b) Where the payee or the income of the payee, which is subject to tax at source u/s-52, is exempted from
tax or is subject to a reduced tax rate in an income year, the Board may on an application made by the
payee in this behalf gives a certificate in writing that the payment referred to S-52 for that income year
shall be made without any deduction or with deduction at a proportionately reduced rate, as the case may
be.

*Deduction from the payment of Certain Services

Section 52AA (1) is substituted as under –
Where any payment is to be made by a specified person to a resident on account of a service as mentioned
in this section, the person responsible for making the payment shall, at the time of making such payment,
deduct income tax at the rate specified in the Table below-
Rate on base amount [A/Y: 17-18]
Sl. Description of Payment
Up to 25 lakh > 25 lakh
1. Advisory or Consultancy Service 10% 12%
Professional/Technical Service/Assistance Fee [Doctor, others require professional
2. 10% 12%
knowledge]
Catering Service
Cleaning Service

On Gross Receipt 1.50%

On Gross Receipt 2%
On Commission 10%

On Commission 12%
Collection and Recovery Service
Private Security Service Provider
Supply of Manpower
3.
Creative Media Service
Public Relations Service
Event Management Service
Event Management, Training, Workshop
Any other service of similar nature
Media Buying Agency Service
4.  On Commission or fee 10% 12%
 On Gross Receipts or bill 0.50% 0.65%
5. Indenting Commission 6% 8%
6. Meeting Fees, Training Fees or Honorarium 10% 12%
Mobile Network Operator, Technical Support Service Provider or Service Delivery Agents
7. 10% 12%
Engaged in Mobile Banking Operations
8. Credit Rating Service 10% 12%
9. Motor Garage or Workshop 6% 8%
10. Private Container Port or Dockyard Service 6% 8%
11. Shipping Agency Commission 6% 8%
12. Stevedoring/Berth Operation Commission 10% 12%
13. Transport Service, Carrying Service, Vehicle Rental Service 3% 4%
Any other service which is not mentioned in Chapter VII of Income Tax Ordinance 1984
14. 10% 12%
and is not a service provided by any bank, Insurance or financial institutions

Provided that if the amount for services mentioned in SL No. 3 (Catering---Service) and 4 (Media buying
agency service) of the Table shows both commission or fee and gross bill amount tax shall be the higher
amount between (i) and (ii) where –
(i) tax calculated on commission or fee applying the relevant rate in the table; and
(ii) B x C x D, where-
B = Gross bill amount
C = 10% for Sl. 3 and 3.5% for Sl. 4, and
D = rate of tax applicable on commission or fee:
Provided further that the rate of tax shall be fifty percent (50%) higher if the payee does not have a twelve-
digit Taxpayer’s Identification Number at the time of making the payment.
Provided further that where the Board, on an application made in this behalf, gives certificate in writing
that the person rendering such service is otherwise exempted from tax under any provision of this
Ordinance, the payment referred to in this section shall be made without any deduction or with deduction
at a lesser rate for that income year.

*Insertion of new subsection u/s - 52R (Deduction of tax from receipts in respect of international phone
call):
2A) where any amount is paid or credited in respect of outgoing international calls, the provider of
Interconnection Exchange (ICX) services or Access Network Services (ANS) shall deduct tax @-7.5% on the
whole amount so paid or credited at the time of such payment or credit.

*SRO No. 257- AIN/IT/2017, date-01 August 2017: Substitution of Rule-17A [Collection of Tax from
Importers]
For the purpose of making collection of tax u/s-53 [Collection of Tax from Importers], the Commissioner of
Customs or any appropriate officer shall collect tax in the case of any import of goods at the following rate-
(a) 5% on the value of the imported goods in case of import of goods excluding the goods mentioned in
clause (b) and clause (c)
(b) 2% on the value of the imported goods in the case of import of goods specified in Table-1 [31 items]
(c) Tk. 800/- per ton in the case of import of goods specified in Table-2 [5 items]
Provided that the collection of tax under this rule shall not apply in the case of import of goods specified in
Table-3 [212 items]
Provided further that the collection of tax under this rule shall not apply in the case of import from Bhutan
of the goods specified in Table-4 [33 items]
Provided further that where the importer or the income from import, which is subject to tax at source
under section 53, is exempted from tax or is subject to a reduced tax rate in an income year, the Board may
on an application made by the importer in this behalf gives a certificate in writing that for the said income
year no tax shall be collected under this rule or tax collected under this rule shall be at a proportionately
reduced rate, as the case may be.
Explanation: In this rule, the words “value of the imported goods” shall mean the value of the imported
goods as determined in accordance with the provisions of section 25 of the Customs Act, 1969 (Act No. IV
of 1969)

*SRO No. 256-AIN/IT/2017, date-01 August 2017 [validity: 01 July 2017 to 30 June 2018]: TDS rate has been
reduced to 0.70% for export value of goods mentioned u/s - 53BB & 53BBBB, except Jute Goods.

*Substitution of section 53E [Deduction at source from commission, discount, fees, from distributor]:
1) Any company making a payment to a distributor, called by whatever name, or to any other person by
way of commission, discount, fees, incentive or performance bonus or any other performance related
incentive or any other payment or benefit of the similar nature for distribution or marketing of goods, shall
deduct or collect tax at the time of payment or allowing the amount @- 10% [subs. for 5% by FA 2001] of
the amount of payment or the amount allowed or the value of benefits allowed, as the case may be.
(2) Any company making a payment in relation to the promotion of the company or its goods to any person
engaged in the distribution or marketing of the goods of the company shall, at the time of payment, deduct
tax @ 1.5% of the payment [inserted by FA 2017].
(3) Any company, other than an oil marketing company, which sells goods to -
(a) any distributor, or
(b) any other person under a contract,
at a price lower than the retail price fixed by such company, shall collect tax from such distributor or such
any other person @5% on the amount equal to B x C, where-
B = the selling price of the company to the distributor or the other person;
C = 5% [for A/Y 2016-17, @ 6%]:
Provided that a cigarette manufacturer company shall collect tax at the time of sale of its goods to such
distributor or to such other person @ 3% of the difference between the sale price to the distributor or the
other person and the retail price fixed by such company.
(4) In this section-
(a) “Payment” includes a transfer, credit or an adjustment of payment;
(b) “Contract” includes an agreement or arrangement, whether written or not.”
Brief:
o TDS from payment as commission, discount, fees, incentive, performance bonus, any other
performance related incentive to a distributor: @ 10%
o TDS from payment in relation to the promotion of the company or its goods: @ 1.5%
o TDS by any company, other than an oil marketing company, which sells goods to any distributor or any
other person under a contract at a price lower than the retail price fixed by such company: 5% X [SP by
the company X 5%]
o TDS by cigarette Manufacturer Company: 3% on [SP of such company-Retail Price]